I think the most popular method is a combination of straight-up UV painting in Photoshop and then painting on the model in 3D Coat. Here are some great youtube tutorials to get you started on the workflow if you aren't already familiar.
Hi everyone! I'm new here and I'd thought I'd kick this off with a little diorama I was working on for the past month. Hope you like it! You can see videos and process at https://www.artstation.com/artwork/Kr3aby
Hey! This is amazing! Love the look and detail of it! I would love to know how you handle the smoothing groups! I really don't have any experience of how you would work with smoothing groups on models like these.