Very nice with the yellow. But yea, once you lay down your color layers, you shoot a layer or two of clear coat over it. It's really just a protective layer; like the plastic wrap that comes over vinyl. It not only helps protect the paint job but gives it a REALLY nice sheen.
Wet sanding isn't too difficult, it's just making sure you don't cut through your layers of paint / primer / clear coat that gets tricky. If you're interested, get yourself some 1000 / 1500 / 2000 grit wetsand paper. Fill a small container with warm water and maybe a little bit of dish detergent. Get yourself a sanding block for a flat surfaces and a sponge for the not so straight surfaces. Wet the paper and sand. When you sand, you're just sanding lightly, no intense pressure's needed. Make sure you keep your strokes going in the same direction. I.E., you were sanding in a downward stroke, sand in a downward stroke.
There's more detailed (and probably way more accurate) descriptions on how to wetsand in the How To section.
Keep up the good work! I can't wait to see how it comes out! =D