Displacment mapping.
http://www.gameshout.com/news/122005/article1959.htm
and
http://www.nintendorevolution.ca/12112005/23/displacement_mapping_patent_nintendo_revolution (provides a sample)
and
in better detail and examples
http://nintendo-revolution.blogspot.com/2005/12/is-displacement-mapping-last-secret.html
http://www.killermovies.com/forums/f66/t375090.html
Please use this thread for discussion.