Hi Bryan,
You have the right attitude, treat every pipe as if it has value because certainly they do to you.
Examine the pipe and see what you can do and know what you can't do (like tenons). I try to take off all the oxidation except on the barrel of the stem and the nomenclature where I do what I can without risking rounding or mismatching stem/shank or removing the logo. If the stem looks pretty beat up then it's better to err on the side of caution.
Never go below indents that are moderate or deeper else you risk the integrity of the stem. When the stem allows you can often shape the button and bite to your preference when you're removing oxidation. If you're unsure, always use a higher grit (finer) because you can always use a heavier grit to remove surface but you can't put it back.
I use (think I mentioned this) padded finger nail files for lower grits and then micro mesh pads and these 3M Zona papers (price just dropped)
http://www.amazon.com/Zona-37-948-Po...ywords=zona+3m
The Zona <5 grits (finest 2-3 papers) are great for the surface of the bowl as well as the fine polish. Give a shout if you have questions.
Regards,
Pete