I am not talking about coolness factor. I have G400Max and know exactly how the technique work.
It's a hack, plain a simple, if you consider the math behind it. There is simply too much approximations.
nVidia have a few demos of real, TRUE Environmental Bumpmapping (not DX6 bumpenv) on their site. Unfortunately, it's emulated in software, and really slow (reading back from framebuffer).
However, effect will be possible with pixel shaders and DX8 compatible hardware.
Leon