ORA-00254: error in archive control string 'string'
Cause : The specified archive log location is invalid in the archive command or the LOG_ARCHIVE_DEST initialization parameter.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Check the archive string used to make sure it refers to a valid online device.
Well, the reason for above error is that i have taken the above script from a 11g database and running it on 10g database. 11g has bring some changes in password management. Below code is executed on 11g and user created successfully, which is expected result.