Lookup is a transformation to look up the values from a relational table/view or a flat file. There are two types of Lookups in Powercenter, namely;
Caching is an important facet of lookup transformation planning. You need to know what kind of data you are dealing with, how frequently do you call the lookup, how frequently does the data change, what is the size of your lookup table etc. among other things. Once you use cache, the trip to database can be avoided, thereby enhancing performance.
Different types of caches can be used with lookup like static, dynamic, persistent, and shared(The dynamic cache cannot be used while creating an un-connected lookup). Each of these has its own identification. For more details, refer to Informatica Transformation Guide.
Lookup is a passive transformation, and can be used either connected or unconnected. Typically, connected lookup is used when you want to do the lookup for all rows. When you have selective lookup requirements, its normally better to go for unconnected lookup. Unconnected Lookup can be used as if its a function call.