What you should have done was put the decals on before the clear coat. That would eliminate any sticking issues, plus, it would be more realistic. It would look like they are painted on instead of decals. It would also mean that you could wet sand and polish the whole outside without damaging or removing the decals. It's all a learning process anyway.
Cutting compound is basically for buffing out small scratches and swirl marks on car paint. There are many different brands, I use Turtle Wax or T-Cut. Just ask at any auto parts / spares place.
What you do is start with a rougher sand paper, like 800 grit, fill a bucket with warm water and a tiny bit of washing up liquid and literally sand the whole body, keeping both the paper and body very wet the whole time. Just be very careful to be light and delicate and try to go in a circular motion. It will seem mad at first, but trust me, this will get results. You don't want to go through the clear, but with four coats you should be well safe. Once you have flattened the "orange peel" texture of the clearcoat, move to a higher grit of paper, like 1200 for example. The idea now is to even out the marks from the rougher paper. Once you are happy, move to 1600 grit and remove the marks from the 1200, all the time doing this with plenty of water. Keep checking your work in good light. The whole point of moving up to finer paper is to remove the marks from the last one, until you get to about 2000 grit (I actually went as far as 2500 grit), the surface should be super smooth and flat. At that point, dry off and use your car paint cutting compound. Take a small area at a time, and with a damp cloth, work it in circular motions for as long as you think it takes to rub out all of the fine marks from the sand paper. Then with a clean dry cloth, buff off the compound and move to another area. This will leave the finish of the body perfectly smooth, like glass, but it will be very dull with no shine. That's were the polish comes in. Again, automotive polish. Buff the crap out of it and the results will blow your mind. Then you can use a car wax if you want, probably going a but far, but up to you.
If I were you I would practice on some cheap static models or whatever you can get your hands on, before you do the truck. That's what I did. My truck is my one and only one so far and I was terrified to ruin it, so painted some guitars and stuff and finally was happy enough to go for the truck. Turned out great. Could be better, I can see where I made mistakes and can improve, but overall, for a first attempt I was pretty happy with myself!
You can see my build here, but the pics are a bit crap to be honest, was not a great camera and there is a lot of dust and fingerprints etc. Must take some new shots.
http://rctruckandconstruction.com/showthread.php?t=3175
Happy sanding!