Multiple Displacements

This is gonna sound like a modelling question but it really has to do with materials + textures. I know there is the displace modifier which I believe actually changes the shape of an object using a texture you place into it but what about the displacement found in the output of a material? Does this one only give the illusion of displacement or are they one in the same? Are they normally used together or apart from each other along with all the other maps? (Specular, Normal, Occlusion)

I THINK, what it does it that it gives shadows to the ridges, therefore, when you look perpendicular, you think it’s used a dis. mod. but in side view, you see flat surfaces

Displacement modifier displaces real geometry with a texture

For the blender internal renderer,
The displacement influence also displaces real geometry with a texture like the displacement modifier except you have less control and the result is only visible at render time, not in the 3d view
The normal influence can create the illusion of displacement with either a bump or normal map

For Cycles renderer