For years I've used a DuPont laquer based putty called Spot-N-Glaze and thinned it to the consitancy of enamel paints using laquer thinner and it has always done a good job for me. Yes, it does shrink, but I rarely have to apply more than a couple of coats to get the results I want.
I'm currently playing around with a Verlinden 120mm figure and am trying Pantel's Liquid Whiteout as a seam filler. It has worked very well for me on my armor and aircraft as a pin-hole filler, so I have decided to see how it works on figures.