I have no idea. Let's find out, shall we?

Let's go to CPAN and search for Sendmail::Milter. The search pages links to one review that says it stopped working with newer sendmail versions. Cpanratings is not the correct place to submit bug reports, so take that with a grain of salt, but it's not a very good sign.

Does this mean its flawless or useless?

The search page also links to the distribution page, which in turn has a link to the bug tracker, which tells you it's not flawless.

If the first, what's the recommended substitute?

I have no idea, but the second search result is Sendmail::PMilter, which is written by a rather competent guy (IMHO), and has had a release in the last 12 months. So, check it out and see if it works for you.