Dead Rising has a peak poly count of ~4 million & that's a hell lot of polygons.
Those polygon rates included multi-pass rendering and shadows btw.
The only way that could be correct was if they were using Xenos' tessellator (which AFAIK converts normal maps into real geometry)
That's only one use, and they're called displacement maps; normal maps are a different matter altogether. The tessellator can do more than just that though.