Sam... I just use fingers and the piece of sandpaper itself. Like I said, the letters are pretty smooth to start with. The paint makes them smooth too.
The large lettering on the
sign posted here was done with a 1.5" wide cabinet makers chisel from the building supply and a box cutter. Except for the curved letters. I used a 1.25" cabinet chisel that I heated and bent into a shallow curve. Not a gouge shape, just a bent chisel.
Most of the curly gold accent was done with a 1/2" Ashley Iles bent V tool.
All the lettering on the ribbon was done with the V tool. (box cutter to neaten corners up)