There are instructions for restoring your faded/yellowed headlights on a budget. All you need is some 1500 and 2500 sandpaper and clear spray paint. I found the sandpaper and some automotive clearcoat lying around at the TechShop in Menlo Park so I thought I'd give it a try and it turned out pretty nice. I'd imagine you could buy the materials for under $10 though if you don't have the stuff lying around.
If you're interested in TechShop, check out their website, http://www.techshop.ws. TechShop is a membership-based workshop that provides members with access to tools and equipment, instruction, and a community of creative and supportive people so they can build the things they have always wanted to make.
Step 1: Step 1: Sand
The problem with most plastic headlights is that they come with a very thin "protective coating" that is supposed to lessen the effects of rock chips and possibly deterioration from UV exposure. Unfortunately, these coatings don't last very long and tend to turn opaque as they age. The goal with the sanding is to get rid of this coating altogether.
It is a good idea to either remove the lens you are working with, or tape of the surrounding area so that you don't accidentally sand the paint.
Start with your 1500 sandpaper, and grab a little cup of water. Using plenty of water, sand the headlight lens for at least 10 or 15 minutes. Dry the lens occasionally and inspect the surface. Once the protective coating is gone, the surface should be even all around. If you still see any rock chips you can continue sanding to try to eliminate them as well.
Once you have an even surface with no coating remaining, you can move to the 2500 sandpaper. Using the same process, sand for another 10 minutes or so, until again the surface looks even and you can't see any scratches from the 1500.
Note: When you are done, the surface should be very smooth, but it will not be clear yet, it will still be foggy from the sanding.
Step 2: Step 2: Paint
Once you are satisfied with the finish, simply spray a few coats of automotive clear coat paint and it will clear up instantly! If you want to buff or polish the clear coat once it's dry you can, but it looks pretty good as is.
Note: If you didn't remove the lens from the car, you'll want to make sure you've sufficiently masked the surrounding paint before spraying the clear.
RushFan made it!