The folks at Carborundum came up with a refinishes guide, let me paraphrase .
Use 36 grit grinding disks for grinding welds and preparing a panel before applying body filler.
For shaping body filler use 40 grit then 80 grit on a file board or 40 then 80 with an 8" mud hog.
For finishing body filler before use primer 80 grit then 180 girt usually on a 6" DA.
For stripping paint down to primer or bare metal use 80 grit on a 6" DA.
When you use replacement panels with the black factory primer sand with p320 on a 6" DA or scuff it with a maroon scuff pad.
When you feather edge use 80 then 180 then 220 once again usually on a 6" DA.
In general 40 grit will take out a 36 grit sand scratch 80 grit will take out 40 grit scratches 180 takes out 80, 220 takes out 180, 320 takes out 220 and 400 will take out 320.
For preparing primer basecoat use 500 or 600 grit and this is the point that I recommend you should use wet sand paper.
For preparing a blend area for your clear use p800 or p1000 again with wet paper or a gray scuff pad.
For clear coat problems like orange peel use p1500 or p1200 or minor clear defects use p2000 or p2500 grit also wet paper.
Now I know that people have other ideas about what sandpaper to use and when so please send some your comments