I am getting a Transform Funct Error, when attempting a JDBC lookup in the transform.

1. The sql syntax is correct
2. The transform project has a valid and defined sql2005 data source (defined in ism console) and is a selectable datasource in the jdbclookup function.

What is missing in order to get jdbclookups to function and be testable during transform development?

here is the lookup syntax

@JDBCLOOKUP('BTS_Support_JDBC',{'SELECT '+'OrderType'+' FROM '+'OrderType'+' WHERE '+'EDISenderID'+' = '+'925485US00'})

where the data exists in the table defined in the jdbc datasource

Sure you correctly entered the values for Url and Driver in the JDBC lookup properties of your transformers project properties?

Next within iWay Transformer, do you have the Test Management option available under the Transformer menu in your release?
If you do, open the Properties... of the default profile you are using (e.g. System_Default)
You should have check-boxes at the lower half of the Profile Properties that allows you to choose DEBUG and/or DEEP DEBUG and to write to a Log File (specify the location of the log file).
Ok, all the way back to your Transform project.
Test your Transform then checkout the log file, it should contain more detail on the Transform Function Error.