When you create a Lookup transformation using a relational table as a lookup source, you can connect to the lookup source using ODBC and import the table definition as the structure for the Lookup transformation.
where as When you create a Lookup transformation using a flat file as a lookup source, select a flat file definition in the repository or import the source when you create the transformation. When you import a flat file lookup source, the Designer invokes the Flat File Wizard.
I found an interesting article on this topic at below links , It quite descriptive
http://www.tecktricks.com/difference-between-relational-lookup-and-flat-file-lookup-transformation-in-informatica/
