Hi H.-
I have 2 thoughts- the first is heat rash, which is pretty harmless and comes and goes depending on how well the body dispells heat. Babies do not release heat well, so that may be an issue.
The second is an allergy. This happened a little to my sisters son when he had barley for the first time. Luckily, 2 months later, when she tried it again exclusively, he was fine. He probably just wasn't ready for it. I would try an oat cereal before doing rice and other grains. And for formula, I reccommend the enfamil lipil premium. It dissolves really great in water, AND there is far less odor. some formulas are really clumpy and stinky, but the premium version of this one seems to be great.
Hope that helps some!
-E. M
P.S. I wanted to add after reading some of the other mom's info that an allergy test is a great idea and should probably be done. I am leery of soy for babies because they don't digest it well, but if your baby cannot do dairy, options are limited to rice milk, etc. Your baby may also not be ready for formula. If you can pump, I would do that. My nephew did not have animal based food/products until he was a year old, and he seems to be doing really great!