Yes I mean the pads.
So like this.
Firm foam pad with course polish.
Medium foam pad with medium polish
Soft foam pad with finishing polish. (Usually a very light polish)
As far as that sandpaper goes. You need to test it out on a panel. See how much Orange peel you can remove without using sand paper.
You shouldn't need to worry that much. There should be a good few microns of clear on the car. Just take the bare minimum off