The freeware version of TOAD (8.5.0.50g) doesn't work with Oracle's instantclient. If you try and run it you get this error: "Can't initialize OCI. Error -1"
And according to this: http://permalink.gmane.org/gmane.comp.db.oracle.toad.free/17606, it has been fixed in the 8.6 version of TOAD. Quest hasn't released a freeware version TOAD > 8.6, so for all intents and purposes, you can't run the freeware version of TOAD.