The databasename may be the SID, don't know exactly. xe is what is mentioned in the database.ini.txt as well which is presumably set up for an Oracle XE setup.
Oracle' s databasename concept is different from MySQL, PostgreSQL..., you need to assign the access right for each user.
I use ZeosLib to connect to Oracle 11g XE with the following setting ( Localhost ) :
ZConnection1.DatabaseName := '127.0.0.1' ;
ZConnection1.Port : 1521 ;
ZConnection1.HostName := '127.0.0.1' ;
ZConnection1.UserName := 'yourusername' ;
ZConnection1.Password := 'yourpassword' ;
ZConnection1.Protocol := 'oracle' ;
It work fine for me ....