Oracle XE installed on Windows 7 created a home in HKLM/SOFTWARE/Oracle,
while Toad 12.1.0.22 looking up for available Oracle homes in HKLM/SOFTWARE/Wow6432Node/ORACLE.
How to reconcile that?
You need to get 64 bit Toad to go with your 64 bit Oracle client.
OR - you can install a 32 bit Oracle client to go with your 32 bit Toad.