High Poly to Low Poly
So yeah with transferring the high poly data to the low poly, it mostly entails projecting the details of the high poly onto a texture/map which is then applied to the low poly, the texture of course doesn't modify the mesh but it does change the way in which light interacts with the mesh, which is why when you look at a model with normal maps from the side it looks perfectly flat.
In xNormal there's a function known as the "cage" which shows what part of the model is being projected where. The closer the cage is to the model the better as there is less room for error. If the cage intersects with the model there will be baking errors. The same goes if the cage intersects with itself, more errors will occur. It can take some fiddling to get it right.
As far as I know, the only way to modify the cage is to use xNormal's archaic 3D viewer and change the settings there, sometimes going as far as to modify individual verts so that they aren't in the wrong place. It's what I had to end up doing with Toad, but that's probably an issue on the modelling side of things and less so on xNormal.
This article on the Polycount Wiki does a great job at defining what a normal map does. Each pixel of the map stores a direction by using certain values of RGB. This changes the appearance of the surface, but the silhouette remains unchanged.
The high to low poly bake applies to other maps aswell, such as AO which puts the high poly AO data onto the low poly.
Welcome to Maya
Everyone's favourite program...
Loaded into the scene I have both a high poly model and a low poly model. There's various issues with my mesh and my UV unwrap on Toad but for something done so quickly it holds up well enough for this example.
Notice how my low poly and high poly are clipping over eachother, this is likely to cause problems later down the line which will be pointed out
Make sure you switch to the Rendering menuset!
Select your low poly, go to the Lighting/Shading menu, and click Transfer Maps...
WORK IN PROGRESS