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You're probably not providing a connect alias and are trying to connect to a local database that is in a different home. You will need to use a connect alias to do this.
If you don't have the alias set up, you can try copying it over from the <XE Home>/NETWORK/ADMIN/TNSNAMES.ORA over to the Developer tools home/Network/ADMIN
Then choose the (probably "XE") alias from the drop down list when you connect in server explorer, or provide in the connect string when opening an OracleConnection object in code.