2000 is generally used for color sanding before buffing and scuffing paint that will not be included in the repair but will get clear coated to blend the repair.
You need 400 for feathering and prep before priming.
This is how i would do this repair..
Use and orbital sander on the paint that needs feathering, 80 grit is good for this job. The area that the paint has chipped may chip even more when sanded, this is normal if the surrounding paint is loose.
Expect the repair area to double or more in size.
The orbital sander will do a good job of feathering, leave the 80 grit scratches alone, don't try to smooth them out, the deep scratches provide a perfect bonding surface for the primer.
Mask of surrounding panels and about 6" bellow the repaired are.
Spray the etching primer and let it dry, then spray you normal primer. Put about 5 coats on letting it dry half an hour between coats, leave it overnight.
Try not to spray to close to the masked area or you will have a primer line that will need to be sanded out.
You will notice the primed area looks terrible, all the 80 scratches are visible.
Now you need the 400 wet and dry, get a small rubber sanding block and a bucket of water with a little soap in the water.
Wet the repaired are and being sanding with the 400 on the block, keep the block flat on the surface and sand at an angle not up and down or left and right, sanding at an angle will keep the repair flat and straight.
Keep the paper and panel wet when sanding, use a dry cloth and wipe it off often to check your progress.
You will notice the scratches disappear, you may break through the primer, no problem just stop sanding that spot and put another coat of primer on when your done "blocking" it out.
When it looks good and the primer touched up if needed scuff the whole panel with the 2000 or a Scotchbrite. Prepsol the whole panel.
Begin painting keeping the gun about 10-12" away to cover the area that has primer and pull the gun back about another 6-8" to cover about 6" below the primed area, put 2-3 coats on.
Wait 30 min then mix the clear, add about 2oz of color to the clear, blow one maybe 2 light coats over the whole panel to blend.
Put one heavy or 2 light coats of clear with no color added over the whole panel.
Unmask the car after an hour and let dry overnight, now you have the option of sanding it lightly with 2000 and water then buff it or just leave it if there are no defects or dirt and only light orange peel.
