A polish is an abrasive, even if it is a mild one like AG SRP
- every time you use a polish, you rub some of the paint off. You will see paint colour on the polish rag. Rubbing paint off every time you wash the car is probably a bad idea.
Some unctions seem to be fillers and sealers e.g. AG Ultra Deep Shine (UDS).
- these fill in micro scratches and seal the surface (doh!). The paint does not colour up the application rag.
A wax is a sealer, it provides an impervious seal to the paint after polishing and filling etc. A polymer "wax" cross-links as it cures making a plastic coating (usually "metalized", use mildly alkaline soap solution to remove). Carnauba wax comes from a palm tree and can set as hard as concrete, and it buffs up very nice and shiny.
AG SRP has almost no cut so won't get rid of swirls or minor paint defects. What it does do really well is fill swirls in so the effect is similar although it will wear off eventually with washing (even if sealed.)
If you get paint colour on your polishing cloths then your paint has no clear coat so this only happens on older cars. Newer cars with a clear coat will show no staining when polishing since the defects are in the clear coat layer (unless they are deep scratches in which case no amount of polish is going to help.)
Polishes do take very small amount of the finish off and the rate this happens at depends on the aggressiveness of the product used and the method used. Aggressive polishes will introduce marring into the paint even though they will rid it of swirls and minor scratches and will require refining with a less aggressive polish afterwards. Light cut or no cut polishes burnish the surface and produce the deep shine that you all love. Polishes leave no protection on the surface and those, like SRP, that have fillers will be washed away the first time it rains. You should always seal the finish with a sealant or wax.
Sealants are synthetic and as such chemically produced to achieve a desired result. They are generally easier to apply than a wax and more durable. The finish tends to be more clinical and sharp. They are good for metallic finishes, especially light colours. If you want ease of use and durability this is a good choice.
Waxes are a natural product (mixed with other stuff including chemicals in some cases.) Waxes are generally harder (not necessarily hard) to apply than sealants and are less durable. They aren't UV stable (generally) and can cause holograms as a result of poor wash technique in hot weather because of the oils present if they not applied correctly. Waxes however leave a richer finish and are more likely to look "wet" with a deep reflection. With dark colours, especially black, waxes can look amazing. Be prepared to redo it every 2-3 months though.
To confuse the matter even more there are now nano technology products that effectively become the new surface of the paint by bonding with (not to) the surface. Their durability can be measured in years (Gtechniq C1 - only available by professional application - can last 3 years for example) with an average being 8-12 months. Wolfs Body Wrap is an excellent product. Some of them have some level of self cleaning properties similar to the Lotus Flower. If you want the most durable protection for your car this is the way to go.
Of course the quality of the finish has more to do with the quality of the preparation than the last stage product used. If you really want your car to look amazing invest in a professional detailing and then look after it! A one day enhancement detail will cost you circa £300 but in almost every case the value of your car will increase by more as a result and you will be blown away by the results.