ORA-39050: parameter string is incompatible with parameter string
Cause : Two parameters were set that were incompatible with each other. Only the first parameter setting will be used.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Decide which parameter is to be used and stick to it.
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.