I use a Milwaukee random orbit sander for my higher grit sanding. I go from 120 grit to 150, then to 220 grit on fine grain like walnut or cherry. Coarse grain woods like oak do not require going to 220 grit. I even go one step further and hand sand with a worn 220 disc and a sanding block in the direction of the wood grain. This will get rid of the last of any pigtail swirls that might still be in the wood from the orbital sander. Once you have the project all sanded you can take lacquer thinner or paint thinner on a rag, after you have dusted the project off, and wipe with the grain, just dampening the surface. This will show you the finished color of the raw wood and you will see any scratches or defects that are still in the wood. This is your last good chance to fix anything by touching up the sanding. You can lightly sand out a sanding mark that shows up after staining, but the sandpaper will gum up with stain and you run the risk of the spot showing up as a different shade.
Once you are satisfied you can either apply your first coat of finish or the stain coat. If you stain, then wait out the prescribed dry time and make sure the surface is wiped free of any excess stain, then apply your first coat of finish. If you stained, I recommend not scuff sanding the first coat of finish. It is very easy to sand through that 1st layer and take off some stain. Then you have a mess. I usually hand rub off any dust or overspray on that first coat, then apply the second coat. After that i use 440 wet and dry sand paper torn into 1/4 sheet and folded in half. I hand sand with the grain with this folded sheet. I use almost no pressure. I use my hand so I can control the pressure better. Also, it prevents the edge or the corner of a sanding block from scratching the finish. All this scuff sanding is doing is getting rid of dust specks. Watch your sandpaper and if little dots of finish stick to it, peel them off with your fingernail. These will mar the finish and show up in the next coat. Polyurethane is notorious for causing these. If you get a lot of these dots your finish may not be hard enough. After a once over with the sandpaper use a T-shirt rag (100% cotton) to wipe off the dust. Next, and this is most important, wipe the whole surface with your bare hand. You will be surprised how much dust is still there. Each pass, wipe the dust off your hand on your clean pants. Go over the surface once more. Now you are ready for the next coat of finish. If you are doing 3 coats of finish, repeat the scuff sanding after the 2nd coat.
If you did a good sanding job and you have a good spray area there should be not roughness on your final coat. If there still is some roughness after your final coat, wait a few days for the finish to cure. This next step is touchy. If the finish is rough you can use 1000 grit wet and dry sandpaper torn into 1/4 sheet and use a sponge as a backer/block. Use almost no pressure and go with the grain. This will leave a satin sheen, but will smooth out the surface. If you want more gloss you can buy from 3-M a micro grit buffing pad. There is also a company that makes 3600 and 4000 grit buffing cloths. Here is the 3-M page for the pads...
Here is the link for the micro buffing cloths...
These buffing pads and cloths will give you a gloss shine if you want it and a perfectly smooth finish.