Bear in mind that changing the size of a mesh effectively changes the Dynamesh resolution. Compare the size of the mesh to the ground plane. If you kept the 256 resolution but decreased the size you'd end up with a mesh with less geometry and softer edges.
riznof : those texture resolutions are the PC texture resolutions. Every texture of the game (except the diffuses maps) have been downsized by 4 for the Xbox360 and the PS3 versions (ie : a 512² on PC became a 256² on previous gen consoles)
heres a picture of the sculpt and the resulting normal map. I dont think its down to the bake. just simply to fine a detail to display on a 256 texture. baked a normal and an AO EDIT: and a close up as photobuckets compression is terrible..
Use RTTAssist, or read up here: http://www.laurenscorijn.com/articles/ambient-occlusion-baking You need to really bump up the settings for MR baking, a 64-128 is the minimum for a good bake. 128-256 for a useable bake.
Thanks everyone! <3 Small update: 512 x 256 Tileable Bricks Bigger version here: https://dl.dropbox.com/u/58237309/Portfolio/AndyHansenBricks1024x512.png Hopefully some different materials soon, thanks again for looking. :)