Definitely take slow323's advice and use a machine polish specifically targeted at removing swirls. If you don't want to invest in a buffer, take it to a detailer or live with the swirls. You will go through hell doing it by hand for dissapointing results.
Check out pakshak for microfibers, great service and prices.
Now i've got to buy a ton of stuff for christmas to remove the dealer-installed swirls.