We refer to a “Lookup” list as a list that is created for the purpose of storing information that existing items can use. A Lookup list would utilize the standard SharePoint Lookup field type and then be made available inside any Flex item.
A very simple example is to add a Lookup list which contains product information that an Opportunity item could draw from.
Another example of this type of list is to keep track of Groups or lists of Media Contacts.
As you can see this list item doesn’t take advantage of the Flex aspx forms because the list item is only for retrieving an item and not for interconnecting to other Flex lists. See screen shots below.
See the bolded section for steps on how to Create a Custom List.