the models actually had bump maps, take a look at that giant dinosaur thing here:
http://planet-adelpha.net/Outcast/screenshots.html

but yes, the environment (apart from the water i think, and the skymap) only consisted of simple voxels

... there once was a making of video online, where they show the process of skinning one of those citicens in outcast, with bump maps.. i'll try to find it, but i don't know if it's still online

edit:
http://www.outcast-thegame.com/gallery/index.htm