Civ 3 City Placement Tutorial

Edit: There's a mistake in this video.

The city square generally produces the same commerce that the tile would otherwise if it was roaded. So there's no problem with planting cities on luxuries or bonus resources that only give bonus commerce (like tobacco, gold, silks, spices, etc.)

The exception is your capital, which produces a minimum amount of commerce, 4 IIRC. You still get the bonus commerce if you exceed the cap, but you weren't close to exceeding the cap, planting on tobacco or whatever won't add commerce.