I just fixed my headlights - they look new! I just read up on headlight restoration out here:
Audi headlight reconditioning by wetsanding and Rotary (pics inside!! 56K warning) - Car Care Forums: Meguiar's Online. And all I did was get a 600, 1000 and 1500 grit and two small sachets of Meguires Plastx.
I must say that auto detailers don't have much idea how to fix such things. All the ones I showed this car to claimed that it could not all be fixed. Glad it worked out for me - it saved me $2000!!