Brian, it's a plasticky feeling and looking product that's used to decorate garments. You'll find stuff like that in art/craft stores, or even in haberdashery shops. WalMart had a nice selection too (I love that shop!). As it dries, it keeps its '3-Dness' and it's therefore useful to replicate rivet heads and stuff like that.
Several brands are available but Tulip and Plaid are probably the best known. They come in dozens of colours and that's handy so that by using contrasting colors between model and paint, you do not get your eyes crossed (too fast!).
Applying the paint is easy, but getting an even line of regularly sized rivet heads can take some practice. I use cocktail sticks to apply my rivets. If you're not happy with your work, just scrape the paint away with the cocktail stick and try again. It's fairly resistant once dry, but I often seal it with a bit of Future applied with a brush.