Personally I would do it all by hand, being a perfectionist.

However, my brother used a woodworking orbit sander on my 78 sedan before he repainted it. It came out pretty good but there are some spots that you can see swirling from the sander being pressed to hard or to coarse of grit used.

I wouldn't use anything less than 400 grit, then do again with 600 grit, finalizing with a palm sanding block and once more with 600 grit to ensure there are no swirl marks. This is how I may be doing my '73 wagon.

If you are painting over existing/repaired factory coat, scuff everything including your repair areas with 320-400 grit, and that will be adequate. This is the advice my paint shop gave me, and I have sanded the entire car by hand. The door edges and jambs that I painted turned out perfect - no sanding swirls or marks at all. The rest of the car needs painted, but it's off to a good start. These cars are not massively large, so hand sanding is a reasonable and achievable option.

Chris