I am looking to have a workflow setup to write to an excel file based on the retrieved field values. Is this possible? or is this only done with SQL? Thanks.
The Workflow activities can connect to any data file that has an available ODBC driver installed and configured on the workflow server. So yes, you should be able to use Workflow to write to excel. The draw back to using excel is that it has a single connection at a time limitation. This means that if the file is open for another workflow or accessed by the end user, your data read/write will fail. It is for this reason that it is normally recommended to use SQL or Access for your data files.
This is spot on. In practice, it's much, much easier to use a SQL database than to connect to a spreadsheet. When you tell Workflow to write to something using an ODBC driver, it attempts to open up as many connections as it can to speed the process up. Even if you can guarantee that only one instance of a Workflow will be attempting to write to an Excel document at a time, Workflow usually maxes out its connections and starts throwing errors. Unfortunately, this limitation from Microsoft makes life difficult.
Note that you can also export tables and queries to CSV (which Excel can handle with ease) in MSSQL. My SQL is rusty at best, but it looks like this process can be scripted and run on a schedule.