Blog

If you want to use SharePoint 2010 WCF Data Services to update SharePoint lookup field in a list; you need remember following things:

To update single Lookup field: Use Id to reference to the looked up list object to the target list object similar as the code below:

item.CompetencyId = competency.Id; //Add looked up list item object by ID
dc.UpdateObject(item);             //Update the target object
dc.SaveChanges();		      //Save changes from data context

To update a lookup field that allow multiple values: Use the AddLink(object source, string sourceProperty, object target) from datacontext with the System.Data.Services.Client.SaveChangesOptions.Batch mode similar as the code below:

//Add multiple link to the target list object
foreach(var competency in competencies)
	{
		dc.AddLink(item, "Competency", competency);
	}
dc.UpdateObject(item);               
//SaveChanges in batch mode
dc.SaveChanges(System.Data.Services.Client.SaveChangesOptions.Batch);

Hope this help!