Use steel wool (not the kind with soap in it, just plain steel mesh) to scrub off the rust. I use olive oil on mine. For the first time, I use the oven so I can season the inside and rust proof the outside. Coat inside and out lightly with oil and bake.
After that, you should only need to worry about the inside.
I NEVER use soap to wash mine. Just hot water. After I wash it, I put it on a stove burner, turn it up high until it's dry.
Let it cool, put a thin layer of oil all over the inside, turn the burner back up to high and turn it off when it starts to smell like hot oil.
After enough uses, you'll have a non-stick surface that's better than Teflon.
I use mine for pretty much anything that doesn't involve boiling.
I've always done mine this way. One of my skillets was my grandmother's and is older than I am, and still in use.