The detailed threads/stitching should be a different color. I can bake the details into a normal. But how can I then texture paint it in the low poly as the threads wont be present there. What is the workflow that is normally used. One solution that I can think of is that I vertex paint the sculpt and bake a diffuse map too but this does not seem right.
You need to UV unwrap both models, then after texturing the high-poly model, bake the textures to the low poly model. For myself, I start with the low-poly, and unwrap it. Then I use it to make the high-poly (sculpt with Multiresolution modifier, for instance). Unwrapping a high-poly model can be difficult. See this thread for more details:
