Oracle: SQLState=IM004 Driver's SQLAllocHandle on SQL_HANDLE_ENV failed

If coincident you got the above error, what I did was to perform the below;

If you navigate Oracle home you will find that the directory has different permissions then the root of the tree. In the case of 10G the path is C:Oracleproduct10.1.0Client_1. Open the properties for the Client_X directory, and you will see that "Authenticated Users" should have Read and Execute, List Folder Contents, and Read. To fix the problem, do the following....
-Select Authenticated Users
-Uncheck Read and Execute
-Press Apply
-Check Read and Execute
-Press Apply

Edited: Another possible solution toward the above error;
Move ORACLEHOME/bin infront of DEVSUITE/bin entry in the PATH variable