It is a bunch of layers set to multiply, overlay, soft light and color mode. Depending on the painting it takes different approaches so just experiment until it looks right and paint over it afterwards to get rid of greyish/desaturated looking parts.
bunch of layers and usually quite a bit of experimentation. I usually start with a layer set to either color or overlay and end up having up to 15 different layers. Also I do background and foreground colors individually
Yes, I use a collection of Overlay, multiply, Color and Hue layers to get the initial colors going (often I mix adjustment layers inbetween and use gradients to quickly adjust the overall lighting). The setup changes every time though. It is different with each painting so it is best to just experiment with the settings.