LOL! I saw this thread 2 years ago on the OGRE forums. AstroZombie is right though. The pixel shader is very often the bottleneck on the GPU, and extra geometry costs are on the vertex shader (meaning: to do this technique you need resources on a pipeline piece that is already usually the hardest working). I can't see this…
You can do some cool tricks with a BumpOffset node in the UE3 material editor to achieve similar results. Haven't looked over all of the documentation at the link, but it seems interesting.
and because games like GTA4 are updated via the console & internet connection, Rockstar could steal this code and implement it into the game on an update. Someone should steal it soon, the guy is offering for free.