Agreed it seems people use there final diffuse and just run them through the Nvidia plug-in.. (or Crazybump). If you had a texture with black and white paint on it.. would you also just run it through the plug-in? The forms should be 'normalmapified' not the colour information.…
I would like to thank everyone for the feedback and the helpful tutorials on how to get my normals looking better. Also the feedback on using my UV spaces better. So here is my updated diffuse texture no normals yet will be working on those soon.