Why is the inside panel of my microwave rusting

Frankly I'm surprised to hear that there is rust inside your microwave oven. Usually the inside is made with stainless steel and does not rust. Are you sure that it is rust? Could it be built up grime? If it is then use some Fantastic and wipe it away.

Good luck

Rust can form from the steam and condensation as you say, and it's a good idea to always cover food and wipe the oven out after using it. You can sand off the bad paint and rust the same way you can on a car, and then touch up the paint if it's a minor amount. Spray paint specifically made for microwave cooking cavities is available. (You don't want to use paint that may have metallic components.) It may be available locally if you have appliance parts stores in your area, and you can find the paint online as well. There's no need to replace the oven just yet, unless you find a good deal on a new one and you're looking for an excuse.

The oven cavity will probably start to rust where the paint is gone. If you're up to it, sand it and paint it with a color that matches the interior color. Other then colors, there is nothing special about paint inside a microwave.

Disassembling the door is a major pain and the streaks will likely only be faded not removed completely. Best solution is replace the door. Otherwise taking it apart(and not damaging it) is your only option.
Eric

IF YOU USE THE MICRO WAVE ALOT WHEN YOU COOK SOMETHING THE STEAM FROM THE FOOD BUILDS ON THE INSIDE AND CAUSES THIS PROBLEM. THE HINGES ARE OPEN AREAS WHERE THIS STEAM CAN COLLECT. NOTHING TO WORRY ABOUT
IT'S JUST ONE OF THOSE THINGS THAT HAPPEN

This is just okay but if you're quite doubtful you may bring this to any appliance service center for repaint

Yes, you can paint over the spots and no, it's not dangerous. I'd let the paint thoroughly dry before using the oven -- it could otherwise cause paint to buckle/ripple/etc.

try the microwave touch-up paint again but this time clean the spots you sanded with rubbing alcohol. also make sure the rollers turn freely

just use sand paper to clean the rust then use some high temperature paint (sold in tins) eg spray paint but it must be labeled high temperature and spray 2 to 3 coats . your microwave should be safe again

The areas can be sanded and painted, but first make sure there are no holes rusted through. If it's all surface rust, then sand and clean as best as you can. If you have any areas rusted through - get rid of the microwave.
Use the paint sparingly - don't try to cover in one or two coats. Best results are obtained with very, very light coats drying 10 minutes or so (depending on the humidity) in between. 10- 15 coats usually works well.
It's best to do this outside, as you'll have lots of overspray.

As far as the paint - the best I've used for the last 20 years or so comes from A.M.I. Parts. You can find them @ www.amiparts.com or toll free 1-800-522-1264.