I used the dry Fix / Dry Flex range of products... Video Here...
http://www.youtube.com/watch?v=2LwuPwCBRR4&feature=related
Superficially expensive until you compare it with the cost of replacement windows.
An excellent range of wood repair products that I can't praise enough.
Chop out all rotten wood and use this product as either a filler or to "glue" in new timber - wait 24 hrs - shape sand and paint.
Peccavi, April 2010