No - you could probably make the normal maps by hand...it just wouldn't be too easy.

As for how, it varies depending on which program you are using (there are a dozen or so that I can think of right now).

In most case you create your low polygon model and then create another high polygon one - which other than the details is the same basic form. You then open up the low ploygon model in the Normal Mapping program and then import the High polygon model over top of that. Click whatever button it has to generate normal maps and wait.

Depending on how fast you computer is, how high poly the high poly model is and a few other factors - you will have your normal map in a few seconds to a few minutes.

Now most of them allow you to preview the model too. This is very important, since you will often have seams in the normal maps that you will want to get rid of. Sometimes you can do that by adjusting the UVs, other times you will need to touch up the normal map by hand (takes a bit of practice...but not too hard).