This error is generally a PATH issue. Essentially, the Forms Builder can't find the .pal (Color Pallet) file.
Have you modified the PATH since you installed Oracle Developer Suite (ODS) 10g? Do you have multiple Oracle installations on your Windows 2003 Server? In my experience, the Developer Suite PATH entries should appear first (after the Windows directories) before other Oracle path entries.
You're right, this is not a common issue. Did you encounter any errors when you installed ODS? Did you install ODS as an Administator? Oracle products need to be installed as an Administrator so the settings changed by the installation will apply to all users.