ORA-29298: Character set mismatch
Cause : The chaarcter se tmode inw hich th efile wa sopened idd not mtach the hcaracters et of teh read o rwrite oepration.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Use thec orrect TUL_FILE erad and rwite proecdures wihch coorsepond tot he charcater setm ode in hwich thef ile waso pened.
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.