Bicycle Mechanics - brake/wheel problem

My 2002 road bike with Ultegra brakes and Velomax Circuit wheels started making a metal to metal grinding noise when I applied the rear brake. This started at about 900 miles. The brake pads looked good but I bought a new set of Shimano Ultrega/Dura-Ace pads and installed them. Upon inspection of the original pads, I could see small bits of metal shavings inbedded in the pads. At about 200 more miles, the same thing happend again and I replaced the pads again with the same problem of metal shavings imbedded in the pads. I spoke to a mechanic at a local shop and he said that he had not seen anything like this. He suggested that I clean the braking surface of the rim with steel wool or 400 grit sandpaper - which I did. The bike now has about 1500 miles and the same problem has started again - I inspected the braking surfaces of the rim with a magnifying glass and found that the metal has some small pitts all around it while the front wheel is very smooth. I have taken special care to align the brake pads with the wheel and inspect them often.
Do I have a bad wheel? Something about the brakes I don't know?
Should I ask the selling dealer to replace the wheel as a safety defect?

I would replace the rim..........also if you ride in the rain, the pads can slip off the rim and the caliper may hit your rim if you put excessive force on your levers.

Jay- I don't understand what you are talking about. How would the pads slip off the rim if they are attached to the calipers properly. I have ridden for years in all sorts of weather and never had any problems with my brakes, other than reduced friction from rain. Your response has nothing to do with the question of why the metal of jaws' rim is pitting and winding up in his brake pads.

Jaws- do your rims have a machined braking surface, or is the entire rim anodized? What type of brake pads are you using, and what type of weather conditions have you been riding in. Also, are you using your rear brake a lot? Best practice is to use the front brake for most stopping, since it has greater stopping ability. Use the rear only as part of a panic stop,or feather lightly to scrub some speed during hairy descents.

Demon: The wheel is machined where the braking surface is. the brake pads are Shimano Dura-Ace R55HC. I'm in Texas so the weather is generally warm to hot - I try to stay out of wet weather although I have been caught out in sudden storms and showers (never had a brake pad to slip off the rim though). I do apply the rear brake more than the front - haven't overcome the fear of hitting gravel or moisture with the front wheel and possibly going down.
Thanks for any advice and help.

I have heard bad things about the shimano pads. get some Kool stop pads and see an improvement. the shimano pads tend to tear up rims.