Unless the squash are extremely small, you can always pick them before the mildew has the chance to do too much damage. The mildew/mold leaves sunken spots on the skin that turn yellow/brown. If it's only on the surface, then wash with some salty water. You can even pick the baby ones with flower attached -- just like in gourmet restaurants.
My first zucchini started off at about 3" when it flowered, and for most varieties, the recommended size for picking is 6"~8". Yesterday, it was about 4". Matter of fact, I'd better go check how big it is NOW.