A Package is necessary when using Sprocs on Oracle 9i or 10g.
I'm not sure if "SYS_REFCURSOR" is available through the BizTalk Oracle adapter, but this is something to verify as well.
If you're new to Oracle stored procs, BizTalk, OR the Oracle adapter I would suggest writing a simple sproc that takes IN a single number or varchar parameter and sends it back as an OUT parameter. Don't forget the package. This simple black-box approach helps you isolate more fundamental system issues.
BizTron