Very interresting experience from an artist previously working 4 years at Crytek. I didn't knew they had such tools, very comparable to Photosculpt's first prototypes:
"Photobump (http://freesdk.crydev.net/display/SDKDOC3/Photobump) is quite an old tool, and I think it's almost forgotten, which is a pity, since I believe this approach to creating normal maps (and the more edittable height maps) is priceless and can be an incredible asset for every game artist. It was made as a pet project by one of the principle coders in Crytek during the development of the original Crysis, and I don't think there's been a version update in the last 5-6 years. It's interface is crude and the tool works quite slowly and is not super stable. But it produces great results (when it doesn't crash :) - very close to the original photos. Tomorrow I can make some comparison shots of low poly geometry rendered realtime with normal maps created by both tools, if you find this helpful.
Here's Photobump's user manual: http://freesdk.crydev.net/display/SDKDOC3/Photobump+User+ManualIt can probably answer some of your more technical questions"