For Starters:
I would watch, rewatch, and rewatch again DavidB's video. A gem even though it isn't very long.
Tip:
Work it horizontally, then vertically, then on the diagonal. Keep the pattern up until the product practically disappears. Then wipe with a MF and some QD.
Examine the area.
If you are looking to hide the swirls, then the following isn't required.
To ensure that the swirls/scratches are fully gone, wipe the area with a 50/50 mixture of Water/IPA (isopropyl alcohol) to remove any oils that remain from the polish to ensure the swirls are removed and not masked.
If further polishing is required, either complete another round of SMR or move up an abrasive level (in 3M line's - that would be the Finesse It II or Perfect III RC/Machine Glaze).
Note: It's very important to work the product fully! Today's products feature diminishing abrasives which helps bring out the high gloss without having to go to another product after compounding. The 3M products do require a lot of working to get optimal results. To often, people just work it for 10-20secs and complain about hazing etc. For myself, I typically work FI II for 3-4 minutes (or longer) before it powdered and was fully removed. I'll probably move onto the Perfect III line (RC and Machine Glaze) after my FI-II bottle is completed. However, the Meguiars Dual Action cleaner polish is rated very very highly and I've only used it a bit was very impressed. That'll probably become my standard this spring/summer.
Make sure to work it good either way.
If you're using a rotary rather than a Dual Action, the product will break down much faster so the 3-4 minutes I spent is dependant on the pad, speed, temperature, machine (DA/Rotary/Orbital), technique etc.
There's some pretty extensive posts so search the archives and you should turn up quite a bit of information...
About the washing/drying of towels.
Tip: Use liquid detergent as the granular version may not fully dissolve and could become embedded in the towel and potentially a rogue granual scratching your vehicle. Most likely not as today's detergents are designed to dissolve pretty quickly and fully but still, better to be safe than sorry.
Drying, I suggest not using a machine as it will weaken the towels quicker and then you need to spritz it with water after the drying to get rid of the static charge.
Also, don't use a softener (sheet or liquid) or anti-static sheets. They put a film on the towel that will decrease the absorbancy, weakens the towel and may lead to smiring when removing or apply products.
Best of luck!
Paco