This is for Blender 2.5 ( if you have 2.49 let me know)
Texture > Image Sampling > Tick Normal Map and change type from Camera to Tangent.
Texture > Influence > Geometry (ticked) - Change Normal from 0.5 to 1.0 (makes the effect stronger)
Hit N > Display > Change shading from Multi-texture to GLSL (GLSL mode always needs lights to see anything)
My workflow is ->
*.vp -> Maja Express -> .dds -> Compressionator -> tga -> GIMP for switching channels and filling missing channels in -> tga -> Blender setting up ------for normal maps
*.vp -> Maja Express -> .dds -> Blender setting up------------ for diffuse, glow and specular
*.vp -> Maja Express -> .pov -> PCS2 -> .dae -> blender --------- for the model
Ps: I wanted to do this as PM but i can't attach anyhing there.
This part is more for having a quick look at the model with just the diffuse texture.
When you have the .dae file, just open it in a good editor (not notepad - craps out on large files) do a replace .tga with .dds and save. Put the .dae and .dds in the same folder and import the .dae. The basic model and diffuse texture will show up in either multitexture or Texture face mode.
There is a script for Gimp that can do the channel swapping in one hit using the Mathmap filter.