ORA-12518 has been known to occur in Oracle Net Services version.

The reason ORA-12518 is being throw may be because of DEDICATED connections because Oracle 10g has a value of PROCESSES is defaulted at 150 which can be lower than necessary in a production system.

ORA-12518 may be thrown in SHARED SERVER because the dispatcher may have reached the maximum connection value, so it denies all other.   

 ORA-12518, you would need to try increasing the PROCESSES parameter so that it can handle the needed number of processes.  You can ensure that you have the needed value by monitoring the listener log for ORA-12518.  Also, note that because the PROCESSES parameter is static, the database will need to be bounced.  

In shared server mode
 
SQL> alter system set dispatchers='(PROTOCOL=TCP)' ;

System altered.

In Dedicated server mode

SQL> conn /as sysdba
Connected.
SQL> alter system set processes=300 scope=spfile;

System altered.

SQL> shutdown immediate
Database closed.
Database dismounted.
ORACLE instance shut down.
SQL> startup
ORACLE instance started.

Total System Global Area  452984832 bytes
Fixed Size                  1291120 bytes
Variable Size             167775376 bytes
Database Buffers          276824064 bytes
Redo Buffers                7094272 bytes
Database mounted.
Database opened.
SQL>