Normal maps - encoded?

[Rastar]

If I check the "Normal map"flag in the texture editor - is the normal map then encoded in some way? For example, like the xy components stored in two channels (green/alpha, maybe) and the third has to be extracted using sqrt(1-g*g - a*a) ?

[shadmar]

height used to be stored in alpha in the old days but I think it's just a "normal" map now.