SQL Server service account Windows privileges and rights
I quite often have to setup MS SQL Server and wondered if anyone can
  provide advice on configuring the accounts the services should run as.
  IMO this has been vaguely documented by Microsoft, while they point
  you in the right direction I have never been able to find any concrete
  examples.


It's actually documented quite thoroughly: http://msdn.microsoft.com/en-us/library/ms143504.aspx

Is there a part of that you're not sure about?


  For simple deployments\development environments it is OK to use the
  virtual account defaults the installer uses: e.g. NT
  SERVICE\MSSQLSERVER


This is going to depend on the environment. I, personally, hate finding a server someone setup using a local account and asking to get access to network resources some time in the future, among other issues.


  For production and in domain environments it's recommended to use
  either a Managed Service Account, or create a domain user account(not
  an admin) for each service.


Again, depends, but generally I would agree (a counter example would be availability groups where it makes sense to use a single domain account across all instances).


  Allegedly if you use a domain account at installation time the
  installer will set any required permissions for you.


Unless there is a failure, etc, it will do so. I'm not sure why the "Allegedly" part.


  If changing the service account on an existing install from a virtual
  account to a domain account the recommendation is to use the SQL
  Server configuration manager to set the new service accounts.
  Allegedly this will set any required permissions for you.


When changing any of the services for SQL Server, always use SSCM. Always. Period. It will set the permissions for the new account to the basics. If before the local system account was used and unrestricted permission to everything on the system was had, I would expect something to fail permissions after the change due to tighter controlled security. That's not a SQL Server SSCM fault, that's an admin fault of not granting proper EXTRA permissions (such as accessing a network share, restricted folders, items outside of the SQL Server install purview, etc.)


  I just tried changing the service account in an existing install to a
  domain account and it would give me a logon failure until I granted
  the account 'log on as service' permission, which contradicts the part
  where the SQL Server configuration manager will set any required
  permissions. (Although im not sure if a GPO may have interfered with
  setting this local security policy)


Sounds like a GPO is causing an issue (IMHO). Wouldn't be the first time :)


  So my question is, if you create a new domain user account for each of
  the SQL Server processes what permissions should be set for each
  account?


I would explicitly set any permissions outside those stated in the msdn link I have above (also given by @joeqwerty and in your OP). For example, on a "backup" folder on a network share, on a new drive added to hold new databases (where setup was already run but the drive didn't exist), etc.


  But it's not clear to me if that is something I should be doing
  manually for the user I create to run the service as, or whether using
  the SQL config manager should automatically set these permissions.


Unless something is extremely broken with the server, these shouldn't have to be manually given.