I'll be interested on this one as well.
I have always used Schlegel wool pads. I sand with 1200 last then use a wool pad with 3M Imperial Microfinishing compound and then with 3M Finesse-it II with a another wool pad. I label the pads to make sure I don't get them mixed up and store them in a large zip-lock bag after using to keep them free of dirt.
I have always gotten a fantastic luster this way but have wondered if there is any advantage to the waffle type pads.
The only occasional problem I have is from dirt particles causing a fine scratch that the buffing can't get out. I am not sure if it happens when I'm sanding or when I'm buffing. I have to go back and touch them up with 1200 and rebuff.