for finish on the lathe on small items, friction polish is the way to go. Sand up to the grit you want to finish at (at least 320). Use sanding sealer if you want to, wiping it on and off the letting it dry (can sand again if you'd like). Then apply friction polish.
My guess is you're not getting a good finish on your friction polish for one of two reasons. First, if you apply it over lacquer, it will partially dissolve the lacquer (my spelling is atrocious), creating a mix that is not meant to be. Second, you may be trying to apply the finish at a too low speed. The whole point of friction polish is to be applied at high speeds and to melt and dry under friction, creating a penetrating and gloss finish. Not real durable but doesn't need to be for most decorative items.
Finally, as great as friction polish is for a quick finish, it is notorious for having small streaks and is a pain in the butt to try and use on anything bigger than 2 or 3" in diameter (tends to create varied thicknesses and so cause lines). I've used it up to about 6" but it gets dicey by that point.
There's my .02 worth.
Dietrich