From what I've read, you're exactly right servo. They digitally scanned a very detailed clay model and then did extensive texture work with Photoshop. But then what they did was make skeletal versions of the dinosaurs, animated the skeletons and then transfered the animation data to the full models. This way the huge meshes didn't bog-down the animation process.

Another intersting tid-bit I learned from the Making of WWD on the Discovery Channel, after the anthropoligists taught the limits of movement and the way the joints worked to the animators, the animators actually taught the scientists a great deal about the way dinosaurs moved, because of the real-world physics simulation in Softimage.