Choosing the right finish for your classical guitar requires you to choose between durability and sound quality. Classical guitars are simultaneously tough and delicate instruments built around the idea that less is more. Less bracing, lighter woods, and lighter finish produce the most sound. If you're looking to make your classical guitar louder, consider a French-polish finish--the same finish used on violins. If you want something thicker, you have many options--polythene and nitrocellulose, basically. Let's assume you want a French-polish finish and go from there.
Remove the existing finish prior to applying new finish. Place a balloon inside the soundhole and inflate it. Mask off the fingerboard with low-tack masking tape. French polish is not a messy process, so masking the fingerboard might is optional. However, it never hurts to be careful.
Wrap a piece of 300-grit sandpaper around a piece of wood or sanding block covered with a thin piece of felt to keep the block's corners from digging into the finish. Work with the grain until the surface is smooth. Wipe down the wood with a rag dipped in benzine, turpentine, or mineral spirit.
Change to a finer grade of sandpaper and repeat the process after the guitar has dried. Repeat the procedure with increasingly finer grades of sandpaper until the finish is completely removed and the guitar is completely smooth. After the final sanding, wipe down the guitar one last time with benzine or spirit and let dry. Remove the balloon.
Pour about a cupful of varnish, shellac flakes dissolved in 1 per cent denatured alcohol, or French polish into a tray. Dip a cotton ball into the finish, shake or squeeze off the excess, and wrap the cotton ball in a square of cloth.
Apply super-thin coats of finish, working quickly and applying the finish in random circular motions. (At this stage, it's OK to apply fresh finish over wet finish.) When more finish is needed, unwrap the cotton ball from the rag and add more finish to the ball. Work this way until the whole guitar body is covered with finish. If the pad sticks, apply a few drops of linseed oil to the pad.
Hang the guitar to dry in a well-ventilated area. When the guitar is dry, wipe down the finish with superfine garnet paper.
Repeat the procedure until the guitar has a super-smooth, even finish. By that time, you will have gone over the guitar's surface hundreds of times.
For the final three coats, work with the grain only. For a glossier finish, add a teaspoon of methylated spirit to the finish in the tray for the first coat, and add more spirit for each successive coat.
Wipe down the guitar using a pad containing only alcohol. This will soften the surface slightly and remove any streaks and marks from the previous process.
Give the guitar a final rubdown using only the palm of your hand. The warmth of your hand will help melt in some of the finish. Continue the rubdown until the guitar has the desired shine.
Repair any dents in the finish with a shellac stick. Hold the stick against the dent and press a heated knife into the tip of the stick. Smooth it off with the knife.