My iron is a steam iron and I put h2o in it to... (by 2 users)

Actually what you are getting out of your iron is not rust per se. Did you use tap water? If tap water what you are seeing is the minerals from the water.
To clean out your iron go to your local fabric store or variety store i.e. Walmart, K-Mart, etc. There is a cleaner made for this. Just follow the directions. You are probably also getting some residue on the soleplate from the brown steam. There is also a sole plate cleaner to get that off.
If you can't find the cleaner just tip your iron upside down over a sink and drain out as much water as you can. Then start using the distilled water. Don't forget to clean the soleplate. Run at least one filling of distilled water through the iron by using it to iron something you don't care about until the steam comes out clean. Otherwise it will spit this stuff out on your good clothing.
For the future to prevent this from happening you need to use distilled water which is available by the gallon at your local grocery store. It's right next to the bottled drinking water.
Even with the distilled water do not let it sit in the iron after you are through. Once the iron cools off hold it upside down over the sink and let the rest of the water drain out before putting iron away until next use.