I typically start with 600 grit, then 800, then 1000. I use 3M Imperial WetorDry sandpaper and lap with some warm water with a drop of dish soap (liquid, like dawn, not electric dishwasher stuff), on a piece of glass. I like to do it outside, with the hose nearby to rinse the paper and make sure it doesn't bind up. There have been questions about how much is too much, and etc, and basically, I don't stress too much, I lap until it is flat and smooth, beyond that I'm not worried about. A pretty mirror finish is kinda worthless to me if it's just gonna get silver goop spread on it and glued down to the chipset... hehe If you've got something that's REALLY bad, you can start with something coarser, 400 or even 250, but that will do it's own scratching and gouging. for things that aren't even remotely flat, some people start off with a file.
Anyway, hope this helps, I'm sure if you searched for 'lapping' you'd get more info than you ever wanted to know, but that's my $0.02.
Peace
John