Reviving again in order to clarify a few things in this thread:
Self-etching primer is sold in a spray can for a reason; it's a great product for a full frame home paint job. It is absolutely unnecessary for a small touch up. If you are spraying it into a cup and then brushing it on, you are using it wrong. The product is meant to be sprayed on very lightly prior to using a standard metal primer. It will also absorb moisture in the air, and should be covered with a base coat asap if you do use it on a project.
Naval-jelly is an acid. Using naval jelly will "etch" the metal and help the paint to adhere. It serves the same purpose as self-etching primer. It's highly amusing to see one recommended while the other is discouraged... but hey, that's the internet for you!
Applied to the surface, the jelly does not need to be neutralized (but excess should be wiped off per manufacturer instructions). [I've coated the entire inside of a frame with the stuff and rinsed it out with standard tap water prior to applying frame-saver after the frame was dry; there is no need to wash out a frame with baking-soda or any other neutralizing agent].
There are better products than naval jelly available that are usually located on the same shelf. Grab a rust-reformer which is a white milky looking liquid that will convert the rust using the same action (phosphoric acid to black ferric phosphate) as the naval-jelly and will also leave a paintable surface which doesn't require a primer and is sealed against moisture. The excess can be cleaned off with acetone once it has dried. We used this product on pumps in a salt-water environment at the bottom of an aircraft carrier without any additional top coats of paint; it does the job. That said, naval jelly will be fine too, but, it is recommended to use a primer with it. FWIW, I find that the Loctite brand (sold at Ace, Home Depot, etc.) works better than the Rustoleum brand sold at Walmart.
@datlas, if you are able to seal out moisture after removing the visible rust, there shouldn't be a need for any additional rust-proofing. A good primer/paint will seal out moisture. Rustoleum makes a rusty-metal primer which can be used on a heavily rusted surface (visible rust). The benefit of a rusty-metal primer is that it has zinc added into the paint which is a sacrificial anode; the zinc will oxidize instead of the steel... stopping the rust cycle. For most cases, the "clean-metal primer" will be sufficient to seal out moisture without the added zinc. If you had rust after painting, it is due to moisture under the paint (or the paint itself was allowing moisture to pass).
Testors enamel or standard nail polish will adhere without a primer, this is not a necessary step (but it may be helpful to seal out moisture)... especially on a bigger chip. I probably wouldn't even bother on any chips smaller than a pencil eraser.
Speaking of pencil erasers: grab some 600grit sand paper and use a hole-punch to make small sanding discs. Use rubber cement to attach these discs to the top of a pencil eraser. Use that to prep your work area. For the most part, I just use rubbing alcohol to remove any light surface rust but I love the pencil trick.
The best applicator is a clean tooth pick dipped 1-2mm into the model paint. Place the tooth pick in the center of the chip and allow it to flow by capillary action into the chip. Several coats may be necessary (keep them as light as possible until the chip is filled). After it has dried for a few days, use a 2000 grit sand paper to level everything out (you can buy this in the automotive dept of walmart). Wait a month, then top with a wax finish.
@Dilberto, if you are happy with the color and want to maintain the decals... just touch it up. Otherwise, give the frame a good cleaning, scrape away any loose paint, and start with a few layers of filling-primer. On an aluminum frame, it doesn't matter so much. If it was a steel frame, I'd suggest a full strip if there was any possibility of hidden rust.
Again, sorry for another revival... my first post here too.
Some of the bad info in this thread was rubbing me the wrong way.
Current Restoration Projects: 1998 Schwinn Paramount / 1977 Motobecane Super Mirage