Dry sand, although you could wet sand... I don't like wet sanding because I don't feel confident that everything is *completely* sealed and don't want to risk getting wet wood. I have used scotchbrite pad as Simon suggested, but I find they are similar to 400 grit..at least the grey ones. Good for initial smoothing, but I like to work my way through the grits up to 2000 and leave it there with no polishing. I'd suggest just work your way to what feels comfortable to you ... On a cleared neck with no paint underneath the scratch marks from the paper are less noticeable so you can get a nice satin feel with lower grits. I found on the black axe bass neck I need to go finer to make it look more even but still feel right... anything beyond 2000 grit and the clear I'm using starts to get shiny again.