There's a better way, IMO, than what you said you're looking for. I have created several custom column based on the work at Metabuilders.com. Which makes for much better reuse than the template column solution.

Are you using .Net 1.1 or 2.0? This was what I did in 1.1 and haven't tried to get it working in 2.0 or the latest MM.Net but it should be a enough to get you started. Also I assume you're using the DataGrid not the new GridView.

First go to Metabuilders.com and download his BoundLookupColumn control and add it to your project.

In the aspx page inside your DataGrid tags you'll put something in like this

<cc1:BoundLookupColumn HeaderText="Location" SortExpression="Location" DataField="LocationID"></cc1:BoundLookupColumn>

In the aspx.cs file you'll have to put some code to load the columns source list like this

BoundLookupColumn blc = BoundLookupColumn.FindColumn(this.grdTeams);
blc.LookupDataSource = // some object that implements IListSource or IEnumberabl - I always used a DataTable
blc.LookupDataValueField = "LocationID";
blc.LookupDataTextField = "LocationName";

Then create a subclass of the mm DataGrid if you haven't already. Then you just need to override at least one of the BindBack methods. Here's how I did it

public override void BindBack(DataSet ds, string tableName)
{
	if (this.EditItemIndex >= 0)
	{
		DataGridItem item = this.Items[this.EditItemIndex];
		int CellNumber = 0;

		foreach(TableCell cell in item.Cells)
		{
			// Need to check HasControls because if a column is set to ReadOnly,
			// HasControls() returns false. Trying to process the controls collection
			// when HasControls() is false, throws an exception.
			if (cell.HasControls())
			{
				DataGridColumn column = this.Columns[CellNumber];
			
				...
				else if (column is BoundLookupColumn)
				{
					BoundLookupColumn BoundCol = (BoundLookupColumn)column;
					if (!BoundCol.ReadOnly)
					{
						if (BoundCol.DataField.Length > 0)
						{
							DropDownList ddl = (DropDownList)cell.Controls[0];
							ds.Tables[tableName].Rows[EditItemIndex][BoundCol.DataField] = ddl.SelectedValue;
						}
					}
				}
				...
			}
			CellNumber++;
		}
	}
}