See the documentation page regarding the Sequence Number template http://www.tersus.com/#Id=3447 - just to be clear, this does not make use of database-specific auto increment functionality, it is implemented in code.
If you wish to use the auto-increment functionality of your database, you can use the databaseGenerated property specified on the Database Record's field - see http://www.tersus.com/#Id=981 & http://www.tersus.com/#Id=4742 for more details.
With regards to the database normalization question, there's certainly no requirement for the data to be "denormalized". Keep in mind that the tutorial's main aim is to acquaint the user with modelling rather than relational-database concepts. Once the user is up-to-speed with modelling, he should be able to incorporate other concepts acquired elsewhere into his modelling.
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