After tons of experimenting I have found the ultimate and most efficient way to set up your custom binds, scripts and settings in Quake 3 and all its mods.
Using an autoexec.cfg file in your baseq3 folder is no secret, but what I have discovered is that an autoexec.cfg file in any mod folder will also work. An autoexec.cfg file will always load last and overwrite anything in the q3config.cfg file. There is a separate q3config.cfg file in every mod folder besides the main q3config.cfg file in your baseq3 folder. The only way to start a mod and have separate settings, other than what you use in vanilla quake 3, is to use a separate config file.

Just playing Quake 3 only
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If you are just playing Quake 3, all you have to do is create a file named autoexec.cfg and put it in the baseq3 folder. You should put all your binds and custom video settings, etc in this file. If your main q3config.cfg file ever gets corrupted or deleted, you will still have all your custom setups safe in your autoexec.cfg file.

If you delete the q3config.cfg file in your baseq3 folder, quake 3 will create a new one the next time you start the game. This new q3config.cfg file will be a stock out of the box config that will not have all your binds and setups the way you like them. If you ever mess up your q3config.cfg file and don't know where the problem is, deleting it and starting with a fresh one is a good idea.

I don't recommend that you alter the q3config.cfg at all. All your customs settings should reside in your autoexec.cfg file. If you want to fool around with settings while the game is running, pull down the console and dial in your binds or settings, then leave the game and go to your autoexec.cfg file and set it up there. The next time you start the game, the new setting will be in effect.

The reason that an autoexec.cfg file is better than some misc.cfg file, is that you do not have to manually execute your custom config file, your autoexec.cfg file will execute automatically after the q3config.cfg file executes. Another reason that the autoexec.cfg file is superior to a misc.cfg file is that some video settings such as r_picmip will not be changed until there is a video restart. You do not want to start a game, execute your misc.cfg file and then do a video restart. It is much better to just start the game and everything is ready to go the way you like it, without doing anything.

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Here is the order the configs are processed.
This is the simplest and most efficient way.

start quake 3

baseq3/q3config.cfg is processed
baseq3/autoexec.cfg is processed automatically

game starts

ready to play.

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Here is how a misc.cfg scenario would go

start quake 3

baseq3/q3config.cfg is processed

game starts

exec the misc.cfg file

some settings did not work because they require a video restart (such as r_picmip)

restart video

ready to play

You can see that the first scenario with an autoexec.cfg file is more efficient and you did not have to do anything special to get your settings up and running. 

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Playing quake 3 mods

The problem with trying to play mods with an autoexec.cfg in your baseq3 folder is that the baseq3/autoexec.cfg will always be processed last. You may have custom binds, video settings, etc. that you want to use for the mod. The easiest way to do that is to add another autoexec.cfg file in the mod folder with all your custom settings. All your custom settings will be set up because the autoexec.cfg file in the mod folder will processed last automatically.

Here is a problem that I could not solve until I created a separate autoexec.cfg file in the mod folder. The mod is Urban Terror and it's folder is q3ut.

The Urban Terror mod has custom binds that you use to bandage, open doors, etc. I also wanted to play it using r_picmip "2" instead of r_picmip "4", I use r_picmip "4" in Quake 3. I do not want lots of textures and detail in quake 3, but in Urban terror, the HUD was blurred and I needed more detail for the game so r_picmip "2" was better suited for that game. I had a misc.cfg file for Urban Terror that I was exec'ing manually but the r_picmip "2" setting would not work, it requires a video restart. Here is what was happening.

Start the Urban terror mod

Urban terror executes the q3config.cfg file

quake 3 code executes the baseq3/autoexc.cfg file (r_picmip "4")

game starts with r_picmip "4"

I manually exec the misc.cfg file for Urban terror

I do a video restart to get r_picmip "2" working

Q3 re-executes the q3config.cfg file

Q3 re-executes the baseq3/autoexec.cfg file and writes over the top of my misc.cfg file. I still have r_picmip "4".

Here is how an autoexec.cfg file solved that problem. Notice the folder names in front of the file names.

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Start the Urban terror mod

Urban terror executes the q3config.cfg file

quake 3 code executes the baseq3/autoexc.cfg file (r_picmip "4")

quake 3 code executes the q3ut/autoexc.cfg file (r_picmip "2")

game starts with r_picmip "2" and all my custom binds.

Another problem with not having an autoexec.cfg file, is with using Gamespy 3D. When you click on a server to play a mod, the game will start without your custom settings unless you tell gamespy to process your misc.cfg file on the "servers properties" for every server you play on.

With an autoexec.cfg file in your mods folder, you don't have to do anything at all,