Window sills are designed to flush rain away from the wall they are framed in. Exterior window sills are often wet and can rot fairly quickly even when caulked and painted. Interior window sills receive moisture when the window is left open during a storm, and because they are painted with interior paint, can weather and decay faster than other interior trim. Damp, rotted wood should be completely replaced, but cracked or weathered sills can be repaired with spackle or resin.
Remove loose paint and dirt. Use a scraper to get rid of flaking or chipped paint, and clean up the area with a wire brush. These same steps can be used to repair outdoor windowsills that are only lightly damaged.
Remove damaged or rotted wood. Damage can come from termites, dry rot or wet rot. Use a knife, screwdriver, chisel or scraper to get down to good wood. If you uncover extensive damage or insect burrows leading deeper into the wood, consider replacing the entire sill.
Clean and dry the area. Use TSP to remove mould and grease. You can use a blow dryer to speed the drying, but heated paint remover guns are hot enough to cause a fire inside the framing of the house--use caution.
Fill in the damage. For light damage, less than 1/2-inch deep, use a latex-based spackling compound. One advantage of spackle is that it can be applied before the area is completely dry, and it will dry with the wood. Another advantage is that it has a long working time, in case you need several attempts to get it right. Follow manufacturer's directions for drying time.
For heavier damage, use a fibreglass or epoxy resin like Bondo. These mixtures are two-part, consisting of the resin and a hardener that have to be mixed. Working time can be as little as a minute or two, so make sure you have enough material and don't waste any time putting it in. Resin is harder to sand than spackle, so be extra careful that you have the right shape without too much excess before it hardens.
For stained or varnished windowsills, use a matching wood filler. These come in water-base and solvent-base types.
Sand the area. Use heavy grit (#80) sandpaper to start. A sanding block will help make the surface flat. After the shape is right, use 120-grit sandpaper to finish for painting. If you see pockets in the fill that are below level, you have to apply more spackle or resin to fill them in, then sand again (you can put spackle over resin, so you don't have to mix the resin again).
Paint the area. Use a primer, let dry, then apply one or two coats of finish paint. Follow manufacturer's instructions for drying times. Because unprimed spackle absorbs a lot of paint it must be primed. Make sure it was sanded smoothly for a flawless finish.
Be certain the area is dry before apply resin, or the rot will bubble back up through the finished paint. Dig out as much rot or damage as possible. It is better to take out too much wood than to leave any rot left to start up again. If the sill damage was caused by a leaky window frame or exposure to a downspout, etc, be sure to fix the problem that caused the damage after you make repairs to the sill.
Uncured resins and hardeners are toxic. Always use protective eyewear when performing work with carpentry tools.