Try copying one of the stock materials in UDK that just have a simple normal map and diffuse setup. Insert your maps into the copy and see what happens. Also just try dumping some regular normal mapped udk assets into your scene and see if they work. The link gun has it's normals on, but that's not a baked material, but it…
My guess would actually be that your lighting itself does not have enough contrast, and the amount bouncing around flattens the effect of normals because equal amounts of light hit the surfaces from most directions. You can compensate for this by increasing the Indirect Normal Influence but that would probably still leave…