Obviously if the third component is derived from the other two, you're going to get a unit normal since you assume the length is 1. Anyone working with such a format would realize that unit normals are the only outcome.
Yes, but I am more concerned about the ramifications of using unit normals. After discussing with DaveBaumann, it became clear that he had no idea about this. And from the reactions on 3Dc of many other people on this forum, it appeared that he wasn't alone.
So I decided to point it out.
It's clear you have an agenda to attack the usefulness of 3Dc.
I think one can only attack the usefulness of 3Dc if one modifies the hardware or drivers supporting it. I am merely pointing out that there are certain methods of normalmapping (which are implemented in current and future engines) that aren't compatible with 3Dc, so ATi promoting 3Dc for everything is a tad premature. It may make developers think twice about using 3Dc, but is that my fault? If there are better solutions than 3Dc in certain situations, why wouldn't people use them?