I've seen and heard alot of different techniques over the years, all of which are somewhat individualized to a person's preferences. After having spent some time with a professional painter who also built scale vehicles with a phenomenol finish, this is what it boils down to:
1. Surface Prep. The underlying surface must be clean of any oils including release agents from molds or your hands. Also any dust/debris from removing seams, sanding, whatever. I prefer a mild dish detergent that does NOT contain anything that conditions your hands. Basic Dawn dishwashing liquid or equivalent is best. Rinse well, do not allow water spots to remain as they can screw with enamels, laquers and acrylics. Poor surface prep tends to show up as fisheyes or areas that the paint doesn't adhere to. Also, plastics tend to get a static charge and will attract airborne particles before and during paint. Clean air is a must as is good handling of the cleaned parts.
2. Surface finish. The smoother and more even the base finish under the paint, the smoother the paint might lay. Sanding marks don't disappear under thicker layers of paint, unless you plan on a ridiculously thick paint job that will hide EVERY detail. A sandable primer will help fill in areas provided you sand it. Some primers are very coarse as applied and should be sanded smooth. Many primers for models have a finer pigment and apply a thinner layer, but also hide less. Primers are not necessary and can often be counter productive. The only exception to a primer is that you must have a good primer barrier when applying lacquers. There are brave souls who spray lacquer on polystryrene without a primer, but one overly thick coat and you have issues.
3. Spraying technique. This depends on the paint you've selected, but my rule of thumb is to apply a mist coat, not attempting to cover everything but get a very light layer over the whole model. It looks a bit rough, but will come through in the end. Once that layer has "skinned" over (dry to the touch but not throughout) apply a slightly heavier coat to fill-in the first coat, but don't attempt to get the paint smooth yet. Allow this coat to skin over again. Once it has skinned come back with the third and hopefully final wet coat. This time build up another layer of paint evenly and continue to paint the entire surface until the finish flashes "smooth". Then stop no matter what. Anymore and you have runs. If another coat is needed, allow the paint to try the full thickness (several hours or days depending on the paint), then sand with a very fine sandpaper. This will help the first coat provide "bite" for the second coat. With practive only the first coat will be necessary as additional coats can loose details molded into the body. Don't forget good clean surface prep. Paint consistency varies, but I personally start with something the consistency of whole milk and tend to thin a little more for finish coats. Most model paints out of the jar are really way too thick. If you use thin coats and slowly build up the layers you won't have problems with runs. Paint that is too thick won't flow over the surface and level out. Thus you get orange peel, a slight series of high and low spots in an otherwise smooth paint job.
4. Clear coat. Not always necessary, but helpful for multicolor paints and to add more depth. If I plan to finish sand a metallic paint I always use clear coat or you'll cut through the paint to the metallics producing an uneven finish. Paint clear coat the same as the paint slowly building up Though it might even out a finish, don't think for a minute it will really hide poor prep. I've seen clear coats beautifully done over paint that still has sand marks visible.
5. Polishing. I prefer to let a paint job dry a very generous amount of time before hand rubbing the finish. You'll need VERY fine polishing cloths which are available in several polishing kits. I start with about a 3600 grit, unless I have a major boo-boo to fix, then slowly work up to 12000 grit. Each grit must be able to sand away the marks from the previous grit getting successively smoother and more even in the process. It is VERY easy to polish through the paint, especially on some cards with lots of edges or raised areas. My advice is to use coarse grits sparingly and spend more time getting the paint applied as smooth as possible in the first place. Polishing kits are the icing on the cake.
6. Final finish. If you use a polishing kit, you'll probably need to use a polishing compound to smooth out the minute scratches from the final grit of sandpaper. Polishing kits comes with some, but auto parts store rubbing compounds work just as well. Don't use an agressive polishing compound like the type intended to restore an bad finish, but a finer compound. I'm a big Meguiar person myself and generally use a #2 for heavier marks, but try to stay with a #3 and polish out spiderweb scratches.(I'll have to check and make sure I don't have those backwards, but you get the idea). I then use a car wax (carnuba wax) to protect the paint from further scratches and give it a smooth ultraglossy look. Again, the "Model Treatment" is simply a very expensive repackaging of everyday Carnuba Wax. Jut be wary of any carnuba wax that "restores" a surface finish as this will also tend to have polishing agents in it. Any liquid or paste polishing compound is a fine abrasive and has the potential to sand through the paint just like sand paper. Use them sparingly.
Basically smooth paint jobs come from Good Prep, Good Process, Practice and Patience. And yes, I have ruined too many paint jobs growing a tad bit impatient and trying to get a touch more paint on when I didn't think it was smooth enough or trying to shortcut a step. And polishing should not be mistaken as a means to fix a bad paint job. It will help fix minor finish problems, but can't make up fore carelessly applied paint or primer. I know, I've tried. All this means I also have a great deal of experience stripping off a bad paint job as well so that I could start all over.