I know this thread is old, but I thought I'd add my two cents anyway for anyone else who might want/need some more information regarding wet sanding. Wet sanding is used on a color coat finish to smooth out the coat and remove "orange peel" which is that bumpiness you can see if you look closely enough. For the best results, you should wet sand between each coat of color applied with 200-600 grit wet/dry sandpaper. The more coats of color you apply, especially if you're using glossy paint, the deeper and richer the color will be. Once you're happy with the overall look of the color, you can buff the finish to achieve a high gloss shiny surface.
I went through the auto body training program in college and most of the principles of auto body finishing can be applied to any kind of paint project. The main differences are the materials used, and the cost. You can actually make a painted piece of MDF look like a super shiny piece of hard colored plastic. It's all about how much elbow grease you put into it. The more you buff, the shinier it gets.