The past week I've been working on getting animated bump textures to work in udk. These textures are to serve as shadows creatures moving across the ground and offsets the terrain as they move.
The material I'll be making in this example is just to demonstrate the steps I took in making the material for the game.

The first step was to make a new photoshop document that was 512 x 512 pixels (the size doesn't need to be this specific size) in rgb mode. I created a black and white image for the desired texture, in this case I simply used black stars on white. I selected all and copied. Under the channels panel I added a new channel called alpha and pasted my stars into it.

Next, I selected the blue channel, clicked filter-->Stylize-->Find edges.
On the red and green I clicked filter-->Stylize-->Emboss. The settings can be whatever is desired so long as both channels have the same settings with the exception of the red channel 's height value which needs to be higher.

The final image should look similar to this. The image must then be save as a targa image with alpha channels enabled.

After the images is saved, import it into udk using the default import settings (with the exception of name and package location of your choosing).
Next create a new material in udk's content browser. Several textures and material expressions will be added into this new material.
2 copies of the bump material we created
1 texture for the diffuse (I used a texture within udk's default content)
an add material expression
a Bumpoffset material expression
a rotator material expression
a panner material expression
you can use the search bar to quickly locate the material expressions

Finally, just connect these items together as in the image. You should now have a material that has an animated normal and bump map. You can also experiment with settings such as in the panner/rotator, or invert the alpha channel to change the direction of the bumps.