We begin with a model of an octopus type creature. You can download the source files here, Octopus.rar . The scene file already has the displacement nodes assigned to the geometry. There are two separate pieces to the model, the nautilus shell and the octopus's body. It has 8,382 total triangles(Figure 1).

Four displacement maps cover both pieces. Samples are shown in Figure 2.

Open the Approximation Editor by going to Window>Rendering Editors>Mental Ray>Approximation Editor. The first option allows you to create single or multiple approximation nodes for each piece of geometry. This is useful to apply different amounts of tessellation to different pieces of geometry or have all geometry use the same node. You can also keep single selected and apply different approximation nodes as you see fit. For this example we keep the default setting of single. The next checkbox allows you to view the nodes in the hypergraph immediately after assigning them. This does not affect viewing the nodes later on. Next, are the four approximation options. Since Maya 8.5 we only need to focus on Subdivisions. It is now only necessary to apply a single Subdivision Approximation node to handle the smoothing of the object and the displacement.  (Figure 3)