If you are in a Unix environment, you can normally set 2 environment variables:

ORACLE_HOME

ORACLE_SID

that will connect you to a local database identified by that home and sid.  If you wanted

to be able to connect to a remote database or a database on that machine via SQLNet, you

can also set:

TWO_TASK = <tnsconnect string>

The setting of TWO_TASK overrides the ORACLE_SID when set.  You will not connecting to a

local database with two_task but rather using sqlnet to connect to a remote database.

So, instead of:

$ sqlplus scott/tiger@some_db

I can:

$ setenv TWO_TASK some_db

$ sqlplus scott/tiger

and the @some_db is implied.

Tom, In the above example, some_db should have been resolved using tnsnames.ora on the box from

which we connect to the remote database. Is it correct? Thanks. 

yes, the "local machine"

it could come from a variety of sources on that machine

~/.tnsnames.ora

$ORACLE_HOME/network/admin/tnsnames.ora

/var/opt/oracle/tnsnames.ora

$TNS_ADMIN/tnsnames.ora

for example 
Why TWO? Why Task?
Thanks, Jan