I have two dropdowns, first one selects T1, T2 or T3. 
  Depending on the first selection the second dropdown will
  match this information with a column name (i.e. T1_sn) in 
  and display all the values under this column in the dropdown.
  First one works fine with choice, I think for the second 
  dropdown which is based on the drilldown value of the 
  first dropdown I cannot do the comparison using the 
  conditional if statement properly.
  Please help.
 <row>
    <panel>
     <input type="dropdown" token="unit_type" searchWhenChange="true">
      <label>Select a traffic unit type</label>
      <default>*</default>
      <choice value="T1">T1</choice>
      <choice value="T2">T2</choice>
      <choice value="T3">T3</choice>
      <option name="count">300</option>
        <drilldown>
          <set token="get_site_code">$click.value$</set>
        </drilldown>
     </input>
      <input type="dropdown" token="traffic_unit_number" searchWhenChange="true">
      <label>Traffic Unit Number: </label>
      <default>*</default>
        <populatingSearch fieldForValue="unit_number" fieldForLabel="unit_number">
          <![CDATA[index=main source=traffic_locations sourcetype=TRAFFIC_DATA 
                  | eval new_val = $unit_type$
                  | eval t1 =  if(new_val=="T1", T1_sn, "")
                  | stats count by t1
                  | table t1]]>
        </populatingSearch>
      </input>
      <row>
 
					
				
		
This is bit confusing (the drilldown on input, I don't think you need that), but give this a try
 <panel>
  <input type="dropdown" token="unit_type" searchWhenChange="true">
   <label>Select a traffic unit type</label>
   <default>*</default>
   <choice value="T1">T1</choice>
   <choice value="T2">T2</choice>
   <choice value="T3">T3</choice>     
  </input>
   <input type="dropdown" token="traffic_unit_number" searchWhenChange="true">
   <label>Traffic Unit Number: </label>
   <default>*</default>
     <populatingSearch fieldForValue="unit_number" fieldForLabel="unit_number">
       <![CDATA[index=main source=traffic_locations sourcetype=TRAFFIC_DATA 
               | eval new_val = $unit_type$
               | eval t1 =  if(unit_type=="T1", T1_sn, "")
               | stats count by t1
               | table t1]]>
     </populatingSearch>
   </input>
   <row>
This doesn't work but line 17
| eval t1 =  if(unit_type=="T1", T1_sn, "")
shouldn't it be 
    | eval t1 = if(new_val=="T1", T1_sn, "")
