I'm confused as to why one would choose to use the ODBC driver when you have a JDBC driver which would provide more capability and better performance from XAware.

We have not tested a DB2 ODBC DSN configuration. It should, in theory, work and you would need to verify that the DSN is a system DSN and that if you are deploying to a server which is somewhere other than the system where your Designer is running that the DSN is also properly configured on your server. If I have time, I'll try to replicate the setup but I would strongly suggest staying with the JDBC driver provided for DB2.