Which # are you using, there's #1, #2, and #3?
Is it 'dissolving' the paint, or just rubbing through (like sandpaper)?
#3 is quite course and would rub through paint pretty quick. I almost never use it.
#2 is a slight rubbing compound. If you rub hard and long enough, it will go through the paint. That's the trick---- knowing when to stop
#1 is a really mild abrasive (as far as I can tell). It seems to be a really fine polish that won't do much unless you've got a fairly smooth surface already. Use this after you've used the #2 stuff. It also works good to polish up aircraft canopies (but I prefer a dip in the ol' Future...)
Generally, I rarely use #3 or #1. I find that #2 works well for smoothing things out and giving a pretty good shine. I sometimes put wax on too (The Treatment).
Hope that helps?! Perhaps you are just rubbing the paint too long/hard??
Murray