Hi Billy,
I would agree with Chris and Mike that a "nextnumber" table is not the way to go.
Coming back to your original sequence syntax error, I suspect the issue here is that for embedded SQL PB adheres to the ISO standard, meaning in this case it's failing due to the absence of a "From" clause (even though SQL Server doesn't require it and similar SQL...excluding the "into" and variable name...in the ISQL Session tab of the Database Painter will execute just fine). Like your Oracle example, you're using "From Dual" which allows it to compile.
Once you add a "From" clause with a legitimate table name (that has at least one record) I'm thinking this should work fine. You may wish to set up a Dummy table with one column and one record for this kind of usage.
HTH...regards,
Mark