>I am wondering what is the best approach to take when we have a listbox of type 1 - Value where we enter our own values in RowSourceType property. It's not like a listbox of type 3 - SQL where we can bound the control source to field on BoundColumn 2. Basically, what is the best approach to bound the control source when entering the values manually at the form designer level?

Sure, it is, you can bind to any column even if you manually enter the values. Use the VFP builder to enter the values and it lets you do this.