Well, I got a bit side-tracked today because when I was doing some research on foliage volumes, I found some interesting stuff about light maps. It turns out, the problem with overlapping UV's has to do with how the object receives light. If the object doesn't have second UV channel for a light map and has overlapping UVs, the object will look like crap. However, with a second UV channel and light map, it looks just fine.
Furthermore, I discovered that UDK really washes out normal maps due to light mass. I did some research online and found that it really improves the visible quality of the normal maps if a Constant3Vector is multiplied with the original normal map with settings something like this:
R = 2; G = 2; B = .7
This jacks up the bump on the normal map and makes it visible even with light mass. Also, I found that it really helps to overlay multiple normal bakes via photoshop to really saturate the normal colors. Check it out:
Without the vector multiply:
With the multiply: