Orange peel can be avoided by painting alone, and in my experience it is difficult to sand out once it shows up. Not impossible, just difficult. I have used for years Alex Kustov's website www.italianhorses.net for my painting information. He's got some great tutorials.
Several smooth light coats should be applied. In between coats, I usually wet sand with 2000 grit paper. Sand until it is flat looking, but not so much that you sand through the color. 3-4 mist coats followed by 2-3 wet coats with some sanding between should yield smooth results.
After the final color coat, I start with the 3200 grit polishing cloth, moving up to the 6000 or 8000 grit cloths, and occasionally using the 12000 grit.
All of the sanding is, of course, wet sanding. I mix a drop of liquid dishwashing soap into some warm water and that's what I use, although I don't think it matters if the water is warm or not.
Hope this helps you some, and check out the link, he's a great painter.