ORA-12658: ANO service required but TNS version is incompatible
Cause : A client process that is running an earlier version of TNS attempted to connect but the connection failed because the server process required that an ANO service (authentication, encryption, etc.) be used.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Relink the calling executable and retry the connection or eliminate the requirement that the service be used on the server side.
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.