Painting --- or repainting --- a guitar with a bound body, without first removing the binding, is a challenging and time consuming task that takes considerable preparation and care during the process. Fortunately, most of the supplies are readily available from auto repair retailers and/or home-improvement centres, and the resulting finish can be as good as, if not better than, the original factory finish.
Remove all hardware and electronics from the guitar before beginning work. For guitars with a bolt-on neck, remove the neck. For guitars with a set or through-body neck, tape off the neck area with masking tape.
Set the guitar body on a sturdy, non-marring, non-skid work surface.
Tape off the binding with 1/4-inch auto pinstriping tape. The pinstriping tape handles curves without crumpling; however, you must ensure that all of the binding is completely covered and that none of the guitar body is covered by errant strips of tape.
Sand the old finish off with a random-orbit or hand sander using 80-grit sandpaper on the first pass to cut through the lacquer. Then move down to 120 grit to sand down to bare wood. Stay well clear of the taped-off binding with the 80 grit paper. When you get down to the 120, gradually move up to the edge of the taped-off binding. Extreme care must be exercised to avoid sanding over the binding. For intricately curved areas, hand sanding is preferred so that more precise control can be applied.
Perform a finish sanding with 220-grit sandpaper; then switch to 440 grit for an ultra-smooth surface. For the final sanding, ensure that you are getting right up to the edge of the taped-off areas. These areas tend to be neglected, in which case a ragged edge will be apparent in the final paint job.
Apply the speciality guitar paint according to instructions on the can. If you choose to use autobody paint instead of nitrocellulose guitar paint, apply as you would apply regular spray paint, with even sweeping strokes. Be aware that the finish of an autobody paint will harden to a hardness similar to nitrocellulose, but it will never have as high a gloss as the speciality guitar paint.
Remove the tape covering the binding when the paint has cured, according to the instructions on the can. There will likely be a couple of spots where the paint has got under the tape or has soaked through an area of tape abraded by sandpaper. Carefully scrape the spots off with a single-edge razor blade.
Attach a buffing head to a rotary drill and buff the entire surface of the guitar, including the binding, for several minutes to bring out the lustre.
Remove the masking tape, reattach the neck, if necessary, and reinstall the electronics.
Paint fumes, especially nitrocellulose paint fumes, are extremely harmful if inhaled. Always paint in a well-ventilated area with an approved respirator.