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Actually, neither bump mapping or this shader stuff displaces the mesh at all. It is a lighting trick and nothing more. So both would have be smooth when viewed on edge. What you need is true displacement mapping and a very dense mesh. The displacement map would reposition vertices based on intensity of light/dark in the texture or displacement map. The more dense the mesh, the more detail.

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Really? Boy I'm getting confused by overlapping terms then. I was playing with the displacement map in 3DS Max and I believe that actually displaced the mesh. I also was reading an article on DX9 that hinted at the ability to dynamically displace the mesh in a sort of LOD scheme that I mentioned so guess I'm confused -my normal state of existence.