I'm not sure why as I normalize before passing the normals to the encode function and after I decode them but that normalize and negation seems to be the key. Just negating alone doesn't do the trick. At least for the stereographic projection. Tried the same on the spheremap but didn't work as good unfortunately ;p
Thanks a lot though
btw what is it that you're doing different with the algorithm than the version on aras page ?
I see you calculate the stereoscale yourself but there appears to be a few other changes.
Also is it correct to sample the encoded normals bilinear ?