As much as I would like to write a book on my 40+ years of diorama building experience, I'm not going to write it here. This is a huge topic and not one that can be adequately described in a few paragraphs. I can however, recommend two outstanding books on the topic, lavishly illustrated with excellent color photos and step by step processes, performed by some of the best modelers in the business. While these books deal with military vehicles, the techniques can be applied to any subject matter.
The first book I would recommend is titled; Rarities, by Mig Jimenez, Accion Press, ISBN: 84-954641-0-1. The second book is; Advanced Techniques, Painting and Weathering Military Vehicles, Auriga Publishing, ISBN: 88-88711-05-8.
These books describe in great detail the techniques you wish to acquire. These are not your everyday, generic, How to Build Scale Models type of books. These books use advanced techniques and specialized products to produce show-winning results. One procedure use to make peeled, cracked, faded and rusted paint requires no less than 8 consecutive steps to produce the desired effect. If you really want to know how to do this right the first time, I highly recommend these books.
To somewhat underscore my point of this being a huge topic, here is a very large page on how to do just the "Dot Technique" and some basic weathering;
http://www.missing-lynx.com/articles/other/awpaint/awpaint.htm
And another basic weathering page;
http://www.track-link.net/articles/13