A comparison of normal map shading quality in the source engine.
To see the baking and model setup watch this video:
http://www.youtube.com/watch?v=l59_R7RENxE
handplane is free for non commercial use:
www.handplane3d.com
Autodesk article about tangent space normal maps:
https://area.autodesk.com/blogs/jean/everything_you_always_wanted_to_know_about_normal_maps_but_were_afraid_to_ask