Can't say it isn't possible, but I can't say anyone would attempt something that advanced/complex. I think that NFS:Underground went a little beyond just relying on shaders.

edit: Unless of course you mean something like this:

http://www.conitecserver.com/ubbthreads/showflat.php?Cat=&Number=425800&page=12&view=collapsed&sb=5&o=&fpart=1#425800