The Perfect Smoothie - Liquid Milk versus Powdered Milk
I've never heard of Powdered Milk being used in a Milkshake, personally.

When I worked at a restaurant, majority of our shakes were made from a Soft Serve machine. Having had shakes at other locations, I gather most use Soft Serve unless they specify "hand-scooped" or "real ice cream", etc.

We'd pour the Soft Serve into a tall metal cup, and add some milk (not too much at first, you don't want it too runny), and then blended with a milkshake blender (can be imitated at home using an immersion blender).

We also had Simple Syrup to add on occasion (can be made at home, or found in your local grocery store, usually in the alcohol/bar isle). You can add flavors, like strawberries, bananas, pineapple (chopped or diced and then thrown in before blending), chocolate syrup, strawberry syrup, etc. Top with whipped cream and candied/maraschino cherries.

We also offered hand-scooped shakes, which were made exactly the same way, except we used real ice cream instead of soft serve.

The trick was to not put too much milk in, you can always add more and blend again. Blending will thin it out too, if you do it too much - so be careful.