Tis' unfortunate isnt it?
I believe it was nVidia's Doug Rogers that first revealed the lack of displacement mapping support in the NV30 a few days ago.
GeforceFX not supporting DirectX9?
Displacement mapping is a technology included in DX9, similar to EMBM was a technology included in DX6, and vertex shading in DX8. It is however most definitely NOT a physical hardware requirement. nVidia is under absolutely no requirements to have displacement mapping capabilities to proclaim full DX9 compliancy.
They've done similarly in the past by not supporting EMBM until DX8... two generations after it initially appeared.
SiS Xabre is able to proclaim full DX8.0 compliancy despite a lack of hardware vertex shading capabilities... as vertex shaders are merely exposed in DX8, but not hardware requirements. (Pixel Shaders however are required)
Another quick example is HigherOrderSurfaces... an option exposed in DX8, the GeForce 3/4 line lacks HOS capabilities.... but is still fully DX8 compliant.
FWIW, next generation hardware with Vertex Shaders 1.3 should be able to do displaccement mapping directly in the vertex shaders... though this wouldnt be a preferable solution.
Current revisions of VS don't support texture sampling in the shaders directly, which would be required for displacement mapping though.... as said, that's not scheduled until VS 3.0
It's a feature I'm strongly in favor of seeing utilized in mainstream gaming... but without wide-spread hardware support it'll likely never see much usage.
It's perhaps not the ideal long-term solution but it should be an excellent technology for the next 3yrs or so.
DM still has room for improvement though, at the moment I really don't consider it a good alternative/extension to/of bump mapping for characters.
It's excellent for terrain though...