Originally posted by julian
The bigger the retention period, the more commited information needs to be kept in the undo segments. Thus the chance for Oracle to overwrite such commited transactions grows. If such info is overwritten, then ORA-01555 will be raised. That's OK as this is just a warning.
Julian,
Allow me to disagree here. The bigger the UNDO_RETENTION lesser the chances of getting OOA-1555 provided your UNDO_TABLESPACE is big enough to support that retention period. If the undo tablespace size is not enough to support the retention period then the trnasactions will be overwritten.
Reducing UNDO_RETENTION will not help getting rid of ORA-1555

A couple of Notes I found on metalink regarding this are here.