Screamer,
That "skim milk" lookin stuff is still available. It's called rust converter and, depending on what part of the country you're in, different brands are available. Here in Florida we get "One Step" or "Extend". Out in the western area of the country I'm told there is one called "Fer-Tan". There may be (and probably are) others with other names. I have used "One Step" many times and had good results.

The way they work is they cause a chemical reaction to take place in the rust. Tannic acid and other chemicals cause the Iron-oxide (rust) to be converted into Iron-phosphate. Iron-phosphate is an inert compound that is unaffected by moisture; hence, the rust is stopped in its tracks.

If you are using any of these products DO NOT spray them. They will ruin your spray equipment and the mist will damage your lungs. Apply it with a brush or sponge and wear rubber gloves because it will turn your skin purple.

It brushes on white, but turns purple-black when dry. If the rust is heavy it helps to wet it (!) first so the rust converter will soak all the way in. After 24 hours you can apply body filler or primer directly over it.