Java Database Connectivity (JDBC)

Do you see the same behavior when connecting via SQLPlus after setting the environment variables? Is this an ODP.NET specific issue? If it's not specific to ODP, you'll probably get better insight by posting in one of the generic database forums.

With respect to ODP specific solutions, have you already checked out the OracleGlobalization class?
http://docs.oracle.com/cd/B19306_01/win.102/b14307/OracleGlobalizationClass.htm#i1009565

Hope it helps,
Greg

Yes even connecting to SQLPlus having environmental variable setting.. facing same problem.. However on explicitly setting NLS cases insensitive session values on each logon it is working..

We have always used the login trigger to set the NLS settings. Our DBA set this up when we were on 10g and still do it now that we are on 11g. There must have been a reason he set up up using the trigger. Maybe same issue you're having. Since we are using connection pooling anyway I believe the login trigger only fires once anyway and we don't have any performance problems with getting connections.

note that if you use the global NLS setting, all of your indexes on text columns must be function based indexes or they won't be used.
i.e
NLSSORT("FIRST_NAME",'nls_sort=''BINARY_CI''')