Greg,
thats right. At game launch, the parameter -configsubdir= determines where the configs are stored. This allows you to do a number of things, including having multiple games running from the same set of files, but with different configs. You do need to keep track of your tweaks in your set of config files though.
When you do hlds updates, keep a log of what files were in the update. If some of your tweaked files have changed, eg rogame.ini, then at least your file was not over written by the update. Though you may have to incorporate your tweaks into the new file. This is what we do with our updates, you will need full access to your servers, a windows login.
This way of handling the ini files works best for the web admin files, because some poeple have had their ini files overwritten, resetting passwords back to defaults, not a good thing.