Well the very first thing I noticed is that your VLOOKUP() is getting an array value instead a single cell as its lookup value.
Let me see if I understand your logic flow:
Take a code (a number) from cell sheet1!A1. Match that to the some cell in Sheet2!A:A
Then, pass the value in the same row in Column C (Value B) if it exists, and Column B (Value A) if it does not. If that doesn't exist, Value A for 160 ($5).
I got something like
C2=IF(VLOOKUP($A2,Sheet2!$A$2:$C$6,3,FALSE)>0, VLOOKUP($A2,Sheet2!$A$2:$C$6,3,FALSE), IF(VLOOKUP($A2,Sheet2!$A$2:$C$6,2,FALSE)>0,VLOOKUP($A2,Sheet2!$A$2:$C$6,2,FALSE),VLOOKUP(160,$A2,Sheet2!$A$2:$C$6,2,FALSE)))
Also for Row B I'm thinking
B2=IF(VLOOKUP($A2,Sheet2!$A$2:$C$6,3,FALSE)>0, "B", IF(VLOOKUP($A2,Sheet2!$A$2:$C$6,2,FALSE)>0,"A"),"A for 160"))
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