The setup described above is a pretty good one. For small reef fishes you could even just use a sponge filter running on an air pump. For larger fishes like tangs and angels a cheap hang on back skimmer is handy. Generally, you should keep the QT running (and thus cycled) through the stocking phase and restart it anytime you want to add more fish.
One thing that is often overlooked that the above tank has is lighting. You need a light on your QT. Many types of protozoan parasites are very difficult to see without lighting. Often you are looking for small amounts of cloudiness on the fins or eyes. The better you can see the fish, the earlier you will be able to catch any potential problems and the less likely you are to lose the specimen. This also relates to the other important point about QT: it doesn't really matter unless you are diagnosing and treating problems properly. A sick fish that has been quarantined but not treated is still a sick fish when you decide to throw it into your display. Unfortunately, that part only comes with experience.
Also, water does not contain nitrifying bacteria. If you start a QT with water from a mature system, it will still go through an ammonia cycle. The beneficial bacteria is on the surfaces of the aquarium and filtration media. In a pinch, you can scoop a media bag of gravel out of a mature tank and add that into the QT as long as circulation is good and the bag is big enough for the fish in question. Any other seeded biological filtration media also works. Ich is more persistent in tanks with porous substrate or media in it, though.
