I used a headlight polishing kit made by Rainex. I've used it before on the wifes car with fair results.
I think I found the secret when doing the mustang lights. The little sanding pads in the kit are too fine if your lights are really yellowed bad. So on the mustang I started out sanding the lights with 400 grit wet/dry sand paper and soapy water. I sanded until all the "yellow" was gone.
Then I started with the sanding pads in the kit. They are just labeled 1, 2, 3 and you used them in order, then use the polishing paste, and finally put on the sealer.., its all part of the kit.
Takes a lot of elbow grease and your arm will be tired by the time your finished, but the results are pretty good.
I did mine on my '87 the cheaper way. Didn't know about any kit at the time, so I wet sanded the entire headlight with 400 grit sandpaper. Let it dry good, then sprayed on a layer of clear coat from a spray can. Took about 15 minutes and had excellent results. Probably lasts longer with the kit, but had mine for 2 years after I did mine and it never faded again.