It has always been difficult to connect to a SQL Server database running on Windows from an AS400.DRDA, which is not supported by Windows. The answer so far has been to use a tool such as DataJoiner. Now with Java Tool Box running on the iSeries, it's possible to connect to a SQL Server from the iSeries.
This is how I did it:
I read a DB2 table on the iSeries and updated it on a table in SQL Server in another Windows machine. We are on V4R5 and have JDK and Java Toolbox loaded on the machine along with Qshell. Toolbox for Java gives a driver called com.ibm.as400.access.AS400JDBCDriver(). I got the Type 4 JDBC driver for SQL Server 2000, which runs on a Unix server from the Microsoft site. I kept the jar files where the native driver for iSeries was kept. The Java program that I coded used the iSeries native driver to connect to local DB2 and also to SQL Server 2000 remotely.