Note that these things have nothing to do with internal functionality of the focus or aperture, nor the condition of the glass. That should all be good before even thinking about this. No sense making lens ergonomics better if the lens isn't known to be worth using!
Step 1: Prepare the Lens
Now clean the lens body. Wet cleaning works best, but remember that "wet" means ever so slightly damp. No liquid should be able to get inside the lens. Soapy water, alcohol, and very sparing use of other solvents can all work on metal-bodied lenses, using either paper towels or cotton swabs. A little alcohol on a cotton swab is usually best for cleaning details like engraved lettering.
Step 2: Reduce Visibility of Wear Marks
If there are unwanted deep nicks and engravings (such as scratched-in ID numbers), they can be colored by this method but not filled-in. If you want to try to fill-in the marks, wait until the next step and then try using several passes of black acrylic paint.
Step 3: Re-Color Engraved Markings
This approach also works for mount alignment dots. In fact, the Sony NEX-5's E mount uses a white alignment dot, but 3rd-party E-mount adapters all seem to have red dots. Thus, I've been using this method to change red dots on brand-new E-mount adapters into white dots.
In general, the first coat will leave a very thin layer in the engraved area. Coverage is great, so one coat should be enough. Additional coats, with appropriate drying time between, can build-up paint to fill the indentation.
Step 4: Replace the Focus Grip
The feel of craft foam is the main reason I prefer it to other possible coverings, most of which are more expensive but more permanent. Most leathers do not give enough grip. Sugru could be very effective, but would tend to give a very hand-made look.
Craft foam sheets come in black, but also come in many other colors -- like the orange used on the lens shown at the start of this instructable. Color-coding camera equipment can be a useful concept... or color can be a fashion statement. In fact, this material even comes in glitter sparkle colors, so you could probably color-coordinate your lenses with bridesmaid dresses.... ;-)