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I am trying to run unit tests in our build process that is Microsoft Team Foundation Server build.



I have embedded the licenses.licx file.

I have created the licenses.config file and placed in it:
MSTest.exe
MSBuild.exe

I have put the licenses.config in the directory that the test assemblies are compiled and run from, the directory where MSTest.exe lives, the directory where MSBuild.exe lives.

I still get "Test method XXX threw exception: CoreLab.Oracle.OracleException: License not valid due to the problems with OraDirect .NET installation..".

Please ensure that OraDirect .NET is installed on server you are running the test on.

I don't have to install Oradirect on my user's boxes too, right? I don't want to install our build server. I want it to be just like our deployments.

You have to install OraDirect .NET on the computer where unit tests are compiled by Visual Studio (build server).
To avoid this you can build *.licenses resource as described in "Licensing"|"Compiling License Manually" section of OraDirect .NET documentation. Use your licenses.licx and licenses.config for compiling with lc.exe utility. Do this on the computer where OraDirect .NET is installed.
Then include *.licenses resource to unit tests and process tests as usual.