As I never found (or perhaps I never search for it enough) a good article about how to manage the init.m files, I ended up developing my own \"standard\", but I wonder how bad I
My Kernel/init.m looks like this:
AppendTo[$Path, Environment["MMA_LIB"]]
Needs["WRUtil`"]
WRUtil contains all of my little utilities and performs other initialization that takes into account the platform and Mathematica version.  MMA_LIB is an environment variable that points to a directory full of Mathematica packages.  That directory is kept under version control and can be shared by multiple Mathematica instances.  I like to keep init.m short so that moving into a new Mathematica installation is as simple as typing two lines that I have committed to memory -- it is surprising how often I seem to have to do this.
Firstly, I would strongly recommend against putting anything significant init.m, since this invariably results in old stuff being broken when you come back to it after a few years. Much better to put your customizations on the path so you can quickly load it at the head of each notebook: That way the context is explicitly stated and you can easily change versions without breaking old stuff.
My current setup is to start with Needs["Janus`"] where the Janus directory has a custom init.m file that loads every file in the directory into the context. This means I can add utility functions in each their own file like this one (clear_cache.m):
ClearCache::usage="ClearCache[f] unsets all numeric-only downvalues of f, \
  see http://stackoverflow.com/questions/5086749"     
Begin["`Private`"];
ClearCache[f_Symbol] := 
  DownValues[f] = DeleteCases[DownValues[f], _?(FreeQ[First[#], Pattern] &)]
End[]
Here is the file Janus/init.m. Note that it prints out the name of the loaded extensions, all in the spirit of keeping the context explicit without too much hassle.
Module[{packageName,packageFileName,fileNames},
  (* $Input is set to Foo.m when evaluating Foo/init.m *)
  If[$Input=="", Print["init.m cannot run interactively"];Abort[]];
  packageName=StringDrop[$Input,-2];
  packageFileName=FindFile[packageName<>"`"];
  If[packageFileName==$Failed, Print["Unable to find package "<>packageName];Abort[]];
  fileNames=Select[
    FileNames["*.m",{DirectoryName@packageFileName},1],
    FileBaseName[#]=!="init"&];
  Print["Loading extensions from "<>DirectoryName@packageFileName<>" to context "<>packageName<>"`:"];
  BeginPackage[packageName<>"`"];
  Do[Print["Loading "<>fn]; Get@fn, {fn,fileNames}];
  EndPackage[]]
                                                                        Having also not followed an official doctrine, I can only tell you what I do.
My Kernel/init.m contains no functions itself.  I use it to:
$HistoryLength SetDirectory etc.DeclarePackage calls