Normal Maps

Normal Maps: Normal maps are textures that are used by Oblivion's render engine to give a model surface an appearance of additional surface detail. In its effect it is very similar to bump-mapping. the normal map is usded in shading the model and provides a convincing relief effect to surfaces, making the model look like it has a much higher polygon-count than it actually does. For Oblivion, normal maps are DDS textures indicated by an _n suffix after the texture's base name.

More info:

Wikipedia article on normal mapping