The Normal needs a Base to work with, so first, let's make a new layer and make it 128, 128, 128.

Now to adjust the Blue channel, go to Image-Adjustments-Levels, scroll down to the Blue channel and set it's input level to 128. Now name it "Base".

I am now ready to make the first Normal Map. I have made a greyscale of the tiles and sending it to the nVidia Normal Map Filter. If you're not comfortable with this procedure, then another application like CrazyBump may be right up your alley and easy to use.

After passing it thru the nVidia Filter, I change it's Blue Channel Output Level to 128.

I made a new Grout group and just like the the Specular and DIffuse, the Brush types 1, 2, and 3 are the same and includes the layer mode settings too.

Here's the Grout Depth with it's Opacity @ 100.

It's probably hard to see, but the Grout Group was not true Black in color (0,0,0), so I made 2 pixel black lines (brush type 3). The same build was also made for the the diamond grout too.

Here's all the layers being used. I do not recommend trying to make one single material for your work as multiple layers offer more control of the final product.

Now, although we have achieved some height already, I want to add just a bit more to the tile to make it a little more "bumpy" and interesting. Here is a Color Map I will use to set up 4 different Stone Normal Maps.

I went and took 2 completely different stone textures, made them greyscale, made sure they were tileable, made each into a Normal Map through the nVidia Filter, and combined them both into one Normal map. Trust me - this works. Make a new layer with this material "Tile Layer 0".

Select a color in the Color Map, select the Tile Layer 0, inverse the selection and cut. Tile Layer 0 is done. Create another Layer with the stone Normal Map as before and rotate the material 90 degrees and make another Color Map selection as before. (yawn) This is fun! Rinse and repeat!

Here's all the layers turned on. Now to build the UPK file.