(16 Apr 15, 07:11AM)Ronald_Reagan Wrote: Well, I'm not sure how hard it is to move from OpenGL 1.x to 2.x...
As far as I know, that upgrade wouldn't even be required. I'm not sure about the OpenGL history, but there was normal map support on DirectX7 already and this has been fixed-function-pipeline as well. You won't need shaders to achieve this I guess. Besides that and as you mentioned already, you'd break with low-end compatibility, which is not desired as far as I know.
About the resolution, that particular screenshot up there doesn't even look that bad, to be honest. Though, you can almost see the single pixels which are 'altered' to create the 3D lighting effect, which makes things look even more square-ish, than smoothly rounded. After all it's a per-pixel effect and in my opinion 64 x 64 pixels would be the least resolution needed, to get some results that actually enhance the look.
-- edit --
I'm not perfectly sure, but most likely normal mapping does rely on hardware lights when computed along a fixed-function pipeline. OpenGL.org has stopped pretty much any support for pre 2.1 versions. At least I couldn't find 1.x documentation on a quick research.
However, let's pretend that was indeed the case. The engine in its current state doesn't make use of hardware lights, but software lighting. So, not only do we lack the height parameter, we don't even have the required entity to pass all values through.
There might be some more or less nifty hacks to get around this, which, if at all possible, will most likely have negative impact on performance. That wouldn't be an issue with modern shader access of course, yet the upgrade isn't quite a solution either like said before.