These are the steps I follow when I lap a heat sink or water block. Although I now use a 2" thick piece of granite that has been tested to .10000 of being flat at University Of Arizona Optical Science Building in Tucson, Az.
1. Use a piece of flat glass 3/8" or thicker as your work surface (it must be very flat, and supported well)
2. Use waterproof sandpaper (sometimes called wet or dry)
3. Use lots of water (several cc at a time, the water flushes the metal particles away, keeps the sandpaper clog free, and makes it stick to the glass)
4. Depending on how flat and smooth your heatsink is, expect to spend 30 minutes or more at lapping the surface.
5. Use a relatively light pressure on the workpiece and move it in a circlular motion across the sandpaper; try to keep an even downward force on the workpiece and avoid digging in the edges or corners. Rotate the heatsink 90 degrees approximately (NOT exactly) every dozen or so strokes.
6. If your heat sink is relatively flat and smooth, then 400 grit is a good place to start. If after ten minutes of work you do not see much progress (there are many pits larger than the surface roughness left by the 400 grit sandpaper), drop to a lower number grit (320) or (260).
7. Using finer grit sandpaper will help improve heat transfer: 1500 is certainly fine enough, but since you need to get such fine grades at an automobile parts store (it is used for finishing automobile paintwork), you might as well get a sheet each of 600, 800, 1000, 1500, and 2000. The more coarse grits are easy to find at a paint or hardware store 40, 60, 80, 120, 180, 220, 280, 320, 400, 600. (Grit # 40 will take the portrait off a franc coin in a minute or so; the average heatsink with faint circular milling marks can probably be started at 320.) 800 grit is where I stop lapping.
8. The work can be completed in less time if you step up through each grade, removing all the pits left by the previous grade before moving to the next finer grit.
9. Each time you change to a finer grit, VERY carefully wash the work surface, your hands, the heatsink, and the sandpaper. Any larger grit left when you start with a finer grade will leave visible scratches.
10. The waterproof (or wet/dry) sandpaper will last a long time. After you are through with the work, wash the sandpaper and let it dry. You can reuse it many times as long as it is not torn.
11. As an example of how fine 2000 grit is, you could use it on Mercedes paintwork and almost not notice an effect other than the missing wax polish.
12. Do not use too much pressure when sanding the heatsink; you want a flat as well as a smooth surface, and too much pressure can cause one edge or corner to be ground down more quickly (that is one reason for occasionally rotating the heatsink a random amount.) Too much pressure may also cause a corner to tear the sandpaper. If you do not tear the sandpaper, one sheet of each grade should last through ten or more heatsinks.