All of the above. All of the responders in this thread have quite a bit of personal experience in getting these troublesome headlight lenses back to a presentable state. I've use both the 3M and Meguiars and found that the materials they contain offer enough capability for anyone, who will take the time and follow the directions, to restore medium-medium bad condition headlights. And I mean restore. If one takes their time, they can be brought back to remarkable clarity.
A couple of caveats (1): I've been tasked in the past to restore a few pairs that displayed a horizontal line of damage. Opaque above and translucent below. This level of damage required me to start with an even more aggressive grit of Wet.dry. 600/800/1000/3M TriZact 1500 Blending Disc and 3M TriZact 3000. The line is caused by the tough outer coating being worn/eroded away above the line. You must start with a level playing field at that point-sand down to bare Lexan and start from there.

Caveat #(2): If you get really good at this, everyone and their brother will be asking you to do it for them. It got to the point, in my case, that I started buying the 3" sanding discs by the box. Even then, the 3000 TriZact are $1/each.

This becomes a pretty satisfying undertaking. I have a neighbors' kid and a 2000 Hyundai that looked like a real slug. Dad asked me to fix the headlights and I did. 99% perfect. The kid knocked on my door the next evening and ask for "some pointers" on how to make the paint and brightwork look a "little better".
Now I have competition! The kids POS looks great, he can see better, and he feels a bit more pride in what is, honestly, a pretty boring car.
This might be contagious!