I started with some craft sand and a glue stick from Wal-mart...
...and some model paints, thinner, and brushes. The brownish paint is actually labeled "rust".
Then I took a fairly shiny piece of metal...
...and applied some rust paint to places that might naturally recieve oxidation. Don't apply very much here. I decided to use only the rust paint in this tutorial.
Then I dipped another brush in the thinner and thinned out the rust paint to make it look more runny.
Then, I applied a generous sprinkling of the craft sand...
...and tapped of the excess.
I then applied a streak of the glue stick. It's works better on rounded edges and corners.
After sprinkling some more sand...
...and tapping off the excess, not bad so far.
I touched it up with some more light dabs of thinner to blend everything together.
After a few minutes of drying, you've got instant rust/corrosion.
Here's how applied this same method to certain parts of my pack.
That's it. The whole process doesn't take very long to apply and the more you do it the better you get at it. I hope this helps!