Yes, it's all about tangent vs. world space.. world space normal maps are on;ly useful if the object will never move or be oriented differently from how the normal map was rendered. Essentially you will never want to use world space normal maps except in very rare cases...additionally, you may need to change how the shader works to use them properly.

Tangent space normal maps are much more flexible, and all games that i know of that use normal maps use mainly tangent space maps.

All normal maps encode 3d data, so that's not a good way to look at it.