HOW: Bring the milk up to 180-190 F ... and hold it there for 2-3 minutes.
WHY: Apparently it kills a protein that affects volume, stability and texture - ref. Cookwise page 80. Yep, in both liquid and dry milk.
Shirley Corriher (food scientist and cookbook author) was also perplexed by this ... and after trying several things discovered that when in doubt, and the recipe calls for it ... do it.
"It ain't what you don't know that gets you in trouble. It's what you know for sure that just ain't so." - Mark Twain