Got to say, I love the headlight and spot kit! Killer deal was had on that one, (especially after the 20% off).
Sanding the outside of the light isn't going to hurt it as that is part of the process. If you have a total failure of the OEM exterior coating you'll have to sand it all to remove it. YES it'll look bad while you're doing it but that is part of the process.
You take your DA and start with 500 grit, 1000, 1500, 2000 and finally 3000 (wet sand all the way). If you want to skip a step between 1000 and 2000 that'll probably be fine. Same thing for 3000 actually if you're using the DA and foam pads along with 105 and 205 to polish it out.
Once that is done (the sanding) take the buffing pads and the DA and get down to business. Megs 105 will remove the 1500 grit sanding marks from polycarbonate if you use the cutting pads. If you've gone to 3000 grit you'll get it polished slick in no time. Do finish with 205, then use Plastix.
You WILL NEED TO SEAL IT after you are done. This is where you'll be best to get Opti-Lens and call it a day. It is said to be able to last the life of the lens, (although its still fairly new so we'll see).