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Comment: Migrated to Confluence 4.0

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How does the tool handle  the SCD TYPE 2 (hISTORY) where it has to TAKE CARE OF insert/update strategy?    Does it has any transformation...?

Again, it's handled automatically by the "Dimension Lookup/Update" step:
http://wiki.pentaho.com/display/EAI/Dimension+Lookup-Update

You don't need to do anything, just fill in the dialog.