Even with lod 1, that should still be close up, hence only during flybys or close quarter combat should they kick in. Also don't use smart bumpmaps (ones with 128,128,128 background), instead use pure white background, you'll get a strong normal map right off the bat.
Well... That works only if you don't want to have any extrusions on the normal/height map. #808080 colour is good in the regard that it allows both indentations and extrusions - brighter is higher, darker is lower ground. What comes to actual strength of the normal map - the actual height information is not present any more in the normal map. It only tells what the slope of the surface is at the UV map's point, so the range of the elevation differences doesn't truly matter. What matters is the sharpness/blurryness of the details on the height map from which the normal is generated. The perceived elevation difference will be the result of the apparent slope angle of the surface and the slope's "length", so to speak.
For example, if the normal map tells the engine that on some location you have ten pixels of 45-degree rising slope from the nominal level, then it appears to the viewer that the elevated part will appear to be about ten pixels higher than the nominal level. Similarly, if the angle of the surface in the normal map is, say, 80 degrees from normal, then the perceived elevation difference will be about 57 pixels worth... And if the height map isn't similarly aligned in terms of elevation difference, then things will look rather stupid when the angled edge of the panel seems to point to the elevated portion being higher or lower than the height map -generated parallax shift makes apparent. Having the increasing elevation on the actual sloped area of the height and normal maps to match is another can of worms...

The height map itself does, of course, have some limits on how much it can mimic the elevation differences, but it seems to me that it's balanced so that having pure white "upper" ground and pure black "lower" ground would result in a not-very-good looking end result.