Restore the original hsqldb-ds.xml. Look in the docs/examples/jca directory, there are several example *-ds.xml files there for many databases, including Oracle. Use that as a guideline. Also, you will have to change the jndi-name to something other than DefaultDS.
There is a wiki page that tells how to do all of this but the stupid search engine for this forum can't find it. Finally found it by digging through the wiki:
http://community.jboss.org/wiki/SetUpAOracleDatasource