I had that problem.. remeber to setup your starter funtion for the material.. and also it is better to make the normalmap yourself with a conversion program.. ATI has such tools on their website..

additional questions for Ventilator..
how do you convert the lighting model to use point lights?
also, can you pass light rgb values?
finally, im trying to setup the shader to use a specific normal map for each entity type.. im having trouble with this becasue i cant use bmap_for_entity in the skin declaration.. i cant see any other way to specify variable skins..