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Normal Mapping - Is one possible implementaion of a technique known as bump mapping. While bump mapping perturbs the existing normal (the direction the surface is facing) of a model, normal mapping replaces the normal in its entirety.
This is done by looking them up in a -texture that is applied to the surface. Each component of a normal vector is represented by a component of the texture, thus xyz maps to rgb.
Normalmapping modulates the way a -texel is lit, depending on the position of light sources in the scene and the normal corresponding to the texel.