When you say Reach uses one "layer" for base, specular, normal, how exactly does that work? You have a texture of a specified resolution and compression that uses x number of bits for colour, x number of bits for specular, y number of bits normal per pixel?
You can theoretically use completely different resolutions for each texture. We tend to call them channels but anything goes. Mass Effect 2 for example conserves texture memory by using smaller resolution normal maps for almost all characters. You don't really notice it because the color and spec layers have the higher detail, but a precise comparison with the PC version could reveal some subtle differences.
And in the Killzone 3 approach, they are all different layers, meaning different possibly different resolution, precision and compression? I guess I'm asking what the advantage of doing everything in one layer is, when you could split them into different layers for flexibility.
By layers I mean using not a single texture map for one channel (color/normal/spec/glow) but combining together multiple textures. Pixel shaders allow you to perform basic Photoshop-like blending between the various layers - adding, masking, overlaying etc. Most engines have shader editors to visualize it in a WYSIWYG environment with a simple graphic interface for the artists. Obviously you'll get the most out of this method if you combine various kinds of textures.
It is commonly used to cover terrain, where you may use a single, non-repeating 2K or 4K texture (can be a satellite photo or something) to get a major color map, then use repeating, tiled textures for sand, grass, rocks, and another non-repeating map as a mask to blend between them (R is for sand, G is for grass B is for rock, for example). It's a pretty common and old technique, starting at around UE2's introduction or so.
The reason it's not as common on characters is that the details are usually far more unique. You want to precisely paint dents and scratches and dirt and self-shadows and such. So most devs will simply choose a high enough texture resolution (2K per character or so) and make sure to scale down parts that are less visible (legs), then place their cameras so that they don't reveal pixelation.
Still, it's evidently a good option for soldier uniforms, at least on the PS3