If they are really bad you might want to start lower like say 400. When I had to do mine there was so many scratches and pits I actually started at 150 grit and worked my way up to 2000. It took a while but they look brand new. Top it off with some 3M rubbing compound and muah perfecto.
As far as getting rid of the condensation you can follow the same How-To I did on how to bake headlights open, which is located in the Aesthetics forum
HERE. I did the same thing on my 94 SHO because the lights had so much water build up inside them they barely served their purpose.
Good luck and if you have any questions feel free to PM me.