There are many examples online and in books on how to create ECTs using SPD. Most of them focus on building ECTs against SQL Server database tables and show you how to create all CRUD operations without differentiating between the different operational requirements for each CRUD operation. Here I will focus on these differences and what they mean.
A SharePoint Content Type is a way for SharePoint to represent an entity. So if you have external data that represents books and publishers, then you will need to create two External Content Types, one representing publishers and another representing books. All ECTs require two operations as a minimum; Read List and Read Item operations. This is because in order to create an external list, you need to be able to read a list of items (books or publishers) and be able to view a particular item (a book or publisher). Each of these operations is a separate request to the database. It is important to note that the Read Item operation is of particular importance as any Update operations will also require a call to the Read Item operation prior to performing the Update.
An Association operation is how the BCS will allow you to get parent-child data. For example, if you have a publisher’s content type and a books content type, then you can use an Association operation to get all the books that belong to a particular publisher. Essentially you need to implement a Stored Procedure that has a publisher identifier as an input parameter and returns book entity fields. In order to do this consistently in the books content type, you should have the Publisher identifier (your foreign key) as one of the fields of the books content type. That field is then used to map the Find Item and Association methods for your ECT. It is important to note that this foreign field has to be a different field than the field that is used as the unique identifier for your child ECT and it has to be unique on the parent ECT. SPD will allow you to use non-integer fields for this, but to avoid runtime errors, make sure the foreign field is of integer type.