pasting from a thread i made in the UDK forum: these images show firstly, the material setup used, and secondly it's effect. it tesselates the mesh based on camera distance (if you just use a constant2vector node, the mesh will be permanently tesselated, which is bad for performance). the alpha channel in the normalmap…
Honestly I think its a bit counter intuitive to use displacement on an object like this, certainly just using enough geometry in an optimized fashion to get the proper curves would result in better performance than sub-dividing your model to 10,000,000 tris or whatever you need to do to get this effect. In addition to…