Have just spent the last month replacing some rusted areas with new metal and grinding and wire brushing as much rust off as I can. Was talking to the counter lady at the body and paint supply and she is telling me that I need to do the bondo and fairing first and then put the Por 15 over it. I thought the Por 15 converts the rust to a more stable compound then seals it. How it that going to happen if there is a coat of bondo in between? Won't it keep rusting?

POR-15 goes directly on the metal. I'm going to venture a guess that the counter lady has zero practical experience with POR-15. . .

Por 15 chemically bonds with the metal as you mentioned.

You should do your major bodywork with a hammer and dolly, then when done por15 (If your going to do it that way) and go from there. If your metal doesnt have rust in it I would suggest going with primer sealer instead, Por 15 has the possibility to react negatively with the paint/primer over it. If this is work in the engine bay or longs then who cares give it some por 15, Bodywork on the otherhand..