Hi there,
I spent an awful long time playing with this setup, and there's a few things you definately need to know or you'll be pulling your hair right out.
If you're running the Oracle server on a DIFFERENT box to where you're running PHP do this:
Get your PC, with NT on it, and put the Oracle 8.1.6 client on there - don't use any other client or you'll be running into problems. Put the latest version of PHP on there, and make sure you're using the latest version of the Oracle extension module. With these in place you're ready to go.
If you're running the Oracle server on the SAME box as you're running PHP do this:
Pop Oracle on there, whatever version, including the client, drop the latest PHP on there too including the latest Oracle extension module. You're ready to go.
When using a local database the extension module shouldn't use TNSNAMES.ORA, but there's a problem somewhere in that when you use a different version of Oracle client (for example Oracle client 8.0.5) with the Oracle extension module it doesn't use TNSNAMES.ORA and instead tries to resolve everything locally which of course it can't do.
Hopefully that will help - assuming that's the problem ;-) !