EDIT: Oops, missed a page, maybe my post is still relevant though, I think I'm in the ballpark at least.
I don't think it's normal mapping, I think it's similar to a system that I used, because great minds think alike
In my case, I made a flat, unshaded sprite, and 3 lighting sprites, with light from the left, top left, and top. My stuff didn't have to move around too much, just sway back and forth a little, so I didn't need a lot of lighting sprites, I'm guessing that's 4 lighting sprites there. Anyway, it's a case of adjusting the alpha values on the sprites depending on light sources... so a light source at the top means the sprite with the top lighting get's more alpha.
The reason why I don't think it's a normal map, well artists don't like normal maps - they don't offer much control, not in a game where everything is hand painted like that. It might mean that every object and background needs several sprites, but the effect in the hands of a proper artist will be so much better than a normal map. Lights would be able to flicker, there wouldn't be a limit to the number of light sources, lights could be coloured - and if they went the extra step and had a shadow sprite as well... heck that would blow some peoples minds I think.
I could be completely off the mark, but I hope I'm not

- the game would look unique with that sort of lighting... and giving Greenlig that level of control just makes sense - normal maps are the devil

I am the one who knocks...
