I didn't changed the way it's working (afaik^^) and I also wondered a bit, why the shadows are that big, but i will look into it.

EDIT: okay I looked into it and you just didn't applied a correct shader. normally the 2nd skin is used as a tiled detailmap. If you use the example shader given with the code, it works fine. I just uploaded it again to proof that its working:

http://rapidshare.com/files/260375668/smtest.zip