Unless the rust on the rebar is significant enough to cause it to drop below ASTM specification, you can use it for the same projects as clean rebar. This information is contained in Section 7.4.2 of ACI 318-95, "Building Code Requirements for Structural Concrete." Surface irregularities and roughness such as those caused by rust increase the bond between concrete and rebar. Typically rebar is used as reinforcement material for concrete that will incur stress or heavy loads such as driveways and bridges. Rebar adds tensile strength to improve the longevity of your concrete project.
Clean rebar coated with oil or grease with a solvent designed for that purpose. Oil and grease can prevent a good bond between rebar and concrete.
Brush rusted rebar with a wire brush to remove excessive rust.
Weigh and measure the rebar after you have removed heavy rust. You need to confirm that the rebar has not dropped below minimum material standards as designated in "Building Code Requirements for Structural Concrete."
Cut or bend the rebar at the job site according to the area where you will pour concrete. Create hooks for ends near the concrete edges.
Lay the rebar in a crisscross, cage, ladder or other pattern suggested by your concrete supplier. You can tie overlapping areas with wire to prevent the rebar from moving as you pour the concrete over it.
Pour concrete into form over your tied rebar pattern. Allow concrete to cure according to building code specifications for the depth of your project.