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Okay so I have a steel hardtail with 2 previous owners. It is a Zion 660. I am unaware as to what the first owner did to the bike but the second said he used it as a commuter and had to get it repainted due to the first owners lack of care. I noticed the other day that it is chipping a lot and while I was pulling of an old sticker I didn't want on anymore, more paint peeled off. What surprised me was that there was rust underneath where I had just pulled of. I opened up my BB and found surface rust inside there. So now I am to the point if I should take care of the rust and get it powdercoated($125) or switch frames to the Sette Reken ($120) which has great reviews. Advice needed.
 

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since 4/10/2009
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I would say that since that frame was a budget frame to begin with, I wouldn't invest in dealing with rust that may be too far along to really and truly FIX. There is quite likely a significant amount of rust on the interior of the frame tubes, too, and it may well be structurally compromised by now.
 

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I am a fan of putting Extend Rust Reformer on my frames. It works well on cars in tropical environments and I have yet to have a frame rust out. Even my '73 schwinn and 93 Giants which spent 10 years in the salt climates of the pacific islands are fine. They were dripping brown from the tubes before treatment. Clean after. External is as easy as waxing with car wax.
 
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