Problem:

This error occurred after upgrading from Oracle 9 to 10 and from Server Express 4.0 SP2 to Server Express 5.0.

Everything worked fine under Server Express 4.0 and Oracle 9. Everything compiles fine with Server Express 5.0 and the connection to Oracle is working as well. Yet when running the application ORA-01017 error occurs.

Resolution:

Check that the fix Patch level is the same for the Server Express and the Application Server for Server Express (Runtime). Once this was brought to the same level the error disappeared.