Base coat is the color. Clear coat is the clear. When you wet sand this, you are wetsanding the clear only, so you must make sure you have a nice base coat, or you will see those imperfectons.
The 2 part paint you want to know about is called a single stage and has 3 parts. The paint, the catalyst and the reducer. You mix them 8 parts paint, 2 parts catalyst, 1 part reducer. You can do 8 to 1 to 1, but whatever you do is fine. When wetsanding this type of finish, you are actually wetsanding the color. You can sand this to be as flat as a peice of glass and leave no orange peel.
Either finish can be wetsanded and then rubbed/buffed to a smooth/high gloss finish. People say single stage paints fade, but this isn't true, it is all on how you take care of it. Even clear coats fade, peel and flake if not taken care of.
I have used both. I like the single stage when painting. You spray one time, no cleaning of the gun necessary until finished unlike base/clear when you have to spray paint, clean gun, then spray clear, and clean gun.