the displacement map doesnt go on the matterial shader it goes on the shading group.

Matterial / surface shaders deal with the look of the surface, if you go to the shading group you will see a slot for a displacement map.

Just drop your texture into that slot, if the results look awfull play with the color balance settings of your pictures to get the amount of displacement ok, and if your rendering with mental ray go to the approximation editor.
Which is Windows, rendering, mental ray i belive. Add add a new displacement approximation and assign it to the object your dealing with and change the preset to a higher quality setting.

GL dude