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According to your operating system platform, see the SQL Developer help
Help | Table of Contents | SQL Developer Concepts and Usage | Location of User-Related Informationfor the location of your preference settings (connections.xml is in some folder below there) and make sure you have write privileges to it.
SQL Developer Team
Edited by: Gary Graham on Aug 24, 2012 1:21 PM
Updated for Windows 7, it is probably C:\Users\<username>\AppData\Roaming\SQL Developer\
unless local policy forced it onto a networked drive, or some similar situation