I thought I'd share the results of the headlight restoration I did on my gf's Avalon. This was the 3M kit from Wal-Mart. It comes with an electric drill attachment, 500 grit sanding discs, 800 grit, a 3000 grit "Trizact" pad, and a foam polishing pad with polishing compound. It comes with enough to do 2 cars. I did this on my Civic too, and it worked good for it too. They weren't as yellow as these, but it got the scratches out.
She says she can see much better light output since I did this. They certainly look much better. The pictures don't do it justice. These are with, then without flash.
Before:
After:
Passenger side before:
And after:
And a close up shot comparing it to the side marker, which is less than a year old: