I keep on forgetting this and coming back to it again! I think the best answer is a combination of the responses provided so far.
Firstly, & is the variable prefix in sqlplus/sqldeveloper, hence the problem - when it appears, it is expected to be part of a variable name.
SET DEFINE OFF will stop sqlplus interpreting & this way.
But what if you need to use sqlplus variables and literal & characters?
e.g.
set define on
set escape on
define myvar=/forth
select 'back\\ \& &myvar' as swing from dual;
Produces:
old 1: select 'back\\ \& &myvar' from dual
new 1: select 'back\ & /forth' from dual
SWING
--------------
back\ & /forth
If you want to use a different escape character:
set define on
set escape '#'
define myvar=/forth
select 'back\ #& &myvar' as swing from dual;
When you set a specific escape character, you may see 'SP2-0272: escape character cannot be alphanumeric or whitespace'. This probably means you already have the escape character defined, and things get horribly self-referential. The clean way of avoiding this problem is to set escape off first:
set escape off
set escape '#'