Just to add my tuppence worth, I find it easier with the lamps still on the car - need to mask off/protect the metal work surrounding first but a slippery, wet headlamp hitting the deck is definitely not good!
Take your time, soak your various grades of papers in a bucket for at least 10 minutes before use, go through all the grades of wet n' dry, keep the lamp wet by squirting with a hand sprayer (if you haven't got one, empty out and thoroughly clean a Flash bathroom spray or similar from under the sink - the wife will never know!) and don't worry - the totally hazed lamp WILL become clear eventually!
Good luck!