Paint advice

Most professionals, myself included, would use an etch primer and then a primer surfacer over it. Another tip, do the car one panel at a time so you dont get overwhelmed, seen this happen quite a few times. Also, wear your respirator!

For your self etching primer, use this avail in a convientient spray can as you only need 2 light coats:
[ame="http://www.amazon.com/U-POL-ACID-PRIMER-M-I-R-COMPLIANT/dp/B003ZWDZ9I"]Amazon.com: U-POL ACID#8 - ETCH PRIMER M.I.R. COMPLIANT: Automotive[/ame]

The reason for using an acid self etching primer is it will help to "kill" and stop the chemical reaction of rust.

As for primer surfacers, a good resonably priced option available at many parts stores is UPOL brand, like this:
[ame="http://www.amazon.com/U-POL-URETHANE-Build-PRIMER-Auto-Car-Paint/dp/B002MCTAT6"]Amazon.com: U-POL 2.1 URETHANE High Build DTM PRIMER-Auto-Car Paint: Automotive[/ame]

Easy to mix, lays out well, and wetsands good. Put 3-4 good coats on.

When it comes time to sand the primer, apply a spray can guide coat and start sanding. Sand it with 320 grit to start and smooth it out and finish it with 400grit for solid colors and 600 for metallics. Hope this gives you a good start.