I am currently looking at trying to generate custom urls/routing using magento, currently I have set a default route in config.xml within the local module.
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The way to do this is with an URL rewrite. In fact, the suffix config you found is probably used by Mage_Catalog to create it's sets of rewrites. I'm approaching this particular feature for the first time so this snippet should be taken with a pinch of salt...
// Creating a rewrite
/* @var $rewrite Mage_Core_Model_Url_Rewrite */
$rewrite = Mage::getModel('core/url_rewrite');
$rewrite->setStoreId($store_id)
->setIdPath('portfolios/'.$url_key)
->setRequestPath('portfolios/'.$url_key.'.html')
->setTargetPath('portfolios/index/action/id/'.$url_key)
->setIsSystem(true)
->save();
A new rewrite is needed for each possible path.
Edit; I've added a setIdPath because it might be necessary.