With this mod, normal maps will be the least of your concerns, there is much more possible like AO, infinite grass distance, YES: Custom REAL Time Combat, better performance and more, as Seedhartha assured me. Also the games functionalities will be the same as before, that means mods should work as usual.
To illustrate the capablities of this baby i did some comparison screenshots from the PBR HDR vid above:
Here the benefits of dynamic lighting are well visible, as you see. the illuminated spots at the floor are colored differently due to its unique lightsources in realtime:
After: the scene isnt always that dark depending on the incoming light:
After: And now my favorite ones - note, how much more it feels like Star Wars with those ground reflections:
Btw, these are vanilla textures, that means the look can be further improved dramatically by quality texture mods.