Step 1: export Lotus Notes database to XML. You can either write a Notes agent or write a java program that does it. I did the latter. The export extracts all fields including rich text, attachment, doc link, embedded image, etc. The attachments and embedded images are encoded in base64.
My first attempt at this was to write an extract in Java, but as I learned later it is much easier handling XML. Plus I had written several parsers before. Keep in mind that everything is extracted, so before extracting a database w/ many document w/ many LARGE attachments you may want to allocated additional time for the effort.
Step 2: Import to SharePoint List: Here is my technique. write java program that parses the extracted XML documents and build javascript/html file that calls SharePoint web services to insert items into the List. Then I import the html file to a document library. The java program builds a button that when clicked runs the javascript that insert items into the list. All the variables such as database name, server name, list name are read from a properties file stored locally.
The program also extracts all Notes attachments. Attachments are actually in the XML file and stored in base64 format. The program builds javascript/ajax code that calls add attachment web service for a given item.
This has been a big hit because the java programs runs outside Notes and extract user defined fields and runtime variables are driven by the property file.
This technique does not use .NET at all. Good thing because I do not know much about it. It is very simple and works for every database, both local and server based.