Oh fudge it. After typing that last post on my iphone, instead of having a nap, I was riled enough to fire up the laptop and explain this all to you properly.
99% of you won't give a damn about how you wash your car. Maybe one or two of you will be interested enough or care about your car enough to at least read the below.
WashingYour car is covered in dirt. This can be dust, grit, mud etc. Washing your car with a sponge means you get to drag these particles across your paintwork. Ever see that spiderweb effect on cars (especially in the sunlight)? That's damage caused by washing.
clicky for DW guideUse a microfibre wash mitt and two buckets (one to rinse the mitt in the 'dirty' bucket and one to load the mitt with 'clean' shampoo water. Use a pH-neutral shampoo.
DryingAgain, most people will use a chamois leather and use it ineffectively. If the car is perfectly clean (it won't be), you go over the car once, wring the chammy and go over again, to continue until dry. If your car isn't clean, you'll continue to drag any unremoved particles across the surface. Water blades inflict damage that needs machine polishing to correct and hence should be avoided.
Better to use a proper drying towel. Instead of scrubbing it across the paintwork, lay it flat and then 'pat' the towel to absorb the water. This minimises the risk of inflicting damage.
ClayingSome crap that is adhered to the car won't come off the paintwork even after washing. Instead you clay the car. This removes any bonded contaminants. The first time you do this to a car, the clay bar will be filthy. Only once you have done this step would I advise you to start polishing the car. Otherwise you're scrubbing dirt into the car!
clicky for DW guidePolishingRemember those spider web effects I was talking about? You remove them through polishing.

^^^ a 50-50 (ie comparison) shot of paintwork correction (shamelessly stolen from another website). Using a machine polish will give you the best correction but most can be reduced by hand polishing. Autoglym Super Resin Polish has both abrasives and fillers. The abrasive particles will break down into ever finer particles whilst also polishing the paintwork. Fillers will help hide some of the swirls. SRP was the best hand polish on DW. The paintwork is built up of layers - primer, base coat, colour coat and clear coat. The clear coat is where the swirls are. It is about 140 microns or so thick (varies from car to car). Polishing will remove 1-2 microns of clear coat, so doing it too often will mean you risk removing the clear coat completely (called clear coat failure). This will require a respray to correct.
clicky for SRP FAQclicky for machine polishing guideGlazeThis basically contains oils to partly fill in any remaining swirls but largely serves to enhance to glossiness of the paintwork, bringing out the colour. Most people don't bother with this stage but it means you don't need to resort to polishing everytime you want to get rid of light swirls. Personally, have found it to bring out the metallic flake on my metallic black car.
SealantCan be a bit confusing with waxes. Sealants seal in the finish, allowing it to be protected for longer. But sealants tend not to leave a glossy look and hence a wax is applied afterwards. Jetseal 109 not only seals paintwork but also provides gloss. Collinite wax does a similar thing and tends to sit on the wax-sealant fence, fulfulling both purposes. I use it in the winter to provide long-acting protection.
WaxThis provides a wet-look shine to the car. Waxes tend to come in a variety - synthetic/natural, carnauba content, colour-charge (very slight tint).
Also don't forget the following:
Windows - you can clay the windows and then clean using something like Autoglym fastglass (or vinegar and newspaper)
Rubber trim - many products including Black Wow and Autoglym Bumper Care
Exhaust - Autosol metal polish or Meguairs next-gen metal polish. Use 00-grade wirewool to remove any rust and degreaser to remove soot.
Wheels - these can be clayed and polished like paintwork. Use a wheel sealant and then next time the dirt will just wash off.
Tyres - tyre gel can leave that wet-look that you get in showroom cars. Doesn't last long (2-3 weeks). Meguairs Endurance Tyre Gel comes highly recommended.