The technique proposed by Id(and other) is not only to have the whole world normal mapped. Doom3 and HL2 were entirely normal mapped to
To my knowledge, the next title of Id, Rage, has unique texture over all surfaces (albedo, gloss and normal map). And they justify this by telling that they can virtually apply an infinite number of decals. (Take a look at the video of their editor on Game Tutorial). That is to say, you can completly avoid texture repetition and add unique details on each surfaces. That is a powerfull tool for artists. And this technique has many other advantages : constant video memory usage, etc...
My demo is long to load because I do not have virtual texturing with loading via streaming from the HardDrive and real time DXT decompression : have a look at this web page http://silverspaceship.com/src/svt/ : real time and fast DXT compression on the CPU is possible The goal of my demo was to show what effects could be possible with real texture virtualization. (not only static unique texturing on surfaces)
One other extension could be to have liquid (blood, water...) flowing on surfaces based on the heightmap and the gravity. (There is one demo of nVidia about this)
I hope I gave answers to all your questions and that I have helped you to understand this technique.