I created my own 256 and 512 uncompressed LandscapeLOD normals. The results are softer landscape shadows.

QN 256 uncompressed is comparable to QN512 with Soft Rolling Shadows.
QN 512 uncompressed is comparable to QN1024 with Soft Variable Density Shadows.
Deathb0rn's QN 512 uncompressed is comparable to QN2048 with Soft Solid Density shadows (no light shadows).

This comes down to personal preference. Comparison screenshots show popular combinations sorted by less detail -> more detail -> less blockiness.


Download the comparison package on Tesnexus
or View As Slideshow - http://s122.photobucket.com/albums/o269/steamuser/PC/oblivion_lod/?albumview=slideshow

a) QN 512 - BTQ 1024 - 10.9 MB
b) QNu 256 - BTQ 1024 - 11.9 MB
c) QNu 256 - BTQ 2048 - 37.8 MB
d) QN 1024 - BTQ 1024 - 17.4 MB
e) QNu 512 - BTQ 1024 - 21.6 MB
f) QN 2048 - BTQ 1024 - 43.3 MB
g) Deathborn's QNu 512 - BTQ 1024 - 21.7 MB



Colormap
BTQ 1024 - 8.7 MB
BTQ 2048 - 34.6 MB

Normals (u=uncompressed)
QN 512 - 2.2 MB
QNu 256 - 3.2 MB
QN 1024 - 8.7 MB
QNu 512 - 12.9 MB
QN 2048 - 34.6 MB


Links:
QN512 to QN2048, and BTQ1024 - http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=3392
BTQ2048 - http://www.tesnexus.com/downloads/file.php?id=7212
Deathb0rn's QN512 uncompressed - http://www.tesnexus.com/downloads/file.php?id=26911
( Deathb0rn's thread - http://www.bethsoft.com/bgsforums/index.php?showtopic=1035886 )
PK's QN256 and QN512 uncompressed - http://www.tesnexus.com/downloads/file.php?id=27046