This is a common question-you'll find a good number of threads here that ask it.
For me, I use Squadron white, thinned with acetone. I use two methods.
One is to apply the putty to the seam, then to use a cotton swab or an old paint brush dipped in the solvent to remove the excess. I wipe across the seam, so as to leave the putty in it but to remove it from the surrounding area.
The other is to dissolve a blob of putty in a little glass jar (eg, old MM or Tamiya paint jars) with a couple drops of acetone. I stir this with a toothpick, till it's consistent, then I use an old paint brush to apply it to the seam. I call it my homemade Mr Surfacer.
I also use regular Mr Surfacer, too.
Another method I use on styrene kits is stretched sprue and liquid styrene cement. I'll stretch a piece to an appropriate size for the seam, lay it on the seam, and flow liquid cement over it.
As far as Perfect Plastic Putty goes, it's great, as long as you don't get it wet after it dries. Water will dissolve it an you'll have your seam back. Wet-sanding is out.