Before you start sanding down your headlights, always try the least aggressive method first. Trying using just Meguiars Plastic X first.
Stay away from any headlight restore kit or sand paper for now.
I have found that after sanding down your headlights, and buffing them out with polish and Plastic X, your headlights begin to haze. It ends up being worst than when you first started. I think the top layer pastic might have a coating and UV protectant.