I searched the forums and there's one thread that really answered my question......kinda. I've never attempted this, so I'm a bit nervous and want to make sure I get it right. From my understanding the steps would go:

1) Sand area w/ rough grit sandpaper
2) Clean all rust out even if it means going all the way through the metal and leaving a hole in your fender
3) Spray any rust with some sort of rust inhibitor
4) Use Bondo to cover up the damage done (is sheet metal involved?)
5) Sand the Bondo down to match the fender
6) Prime, Paint, Clear

Here's a nice picture of the rust on one of my fenders. There's something like this on the other side too, just not HALF as big.