With me, it depends on the application. On quick fixes, I too use toothpicks and glue. Now, some holes are Dry-Rotted and just using toothpicks is not good enough so you have to remove some bad wood. I encountered one SideLock that after removing the dry-rot, it left me with about a 3/8" hole. Even after using toothpicks, you still have to wrestle with proper alignment as your screw will want to take the path of least reistance. ....
I know of a smith that hand cuts a plug or inserts toothpicks without any glue.
Most of the time, I use the listed Midway video version and you don't have to worry about the drill bit walking on you. Larry did not mention the use of glue but you can see it in the video and it's Titebond-II. I prefer Titebond-III on all gun-wood application.
Good Luck and;
Be Safe !!!