Definitely not. People still launch WoW directly, and I am pretty sure some people still use multiple WoW folders.
These are still kept in Config.WTF under the WoW\WTF folder. WoW uses the same Config.WTF file for all of your characters.
ISBoxer automatically keeps separate settings per-Character for you, so a simple answer is "use SBoxer"

... But assuming that's not the answer you wanted, one workaround some people use is to manually (or with a .bat file, etc) copy Config.WTF files when launching a new instance of WoW. Bear in mind, of course, when each game window saves its settings it is going to save those settings in Config.WTF, so usually with this method you keep a permanent copy of the settings you want as another filename, and then copy it TO config.wtf.
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