Once you've determined the filler has cured, take a sanding block loaded with 80-grit paper and begin to run it back and forth over the surface of the filler in long, smooth strokes, making sure to extend your strokes out onto the surface of the panel well beyond the outer edges of your filler. At this point all you're trying to do is sand the filler down to as close to the surrounding undamaged panel as possible-no need for this step to be perfect, though, as this is where the next step of the process comes into play.
The next step is a second coat of filler. This is called a "skimcoat." The skimcoat is an application of filler that's about an eighth of an inch thick that you will apply to the panel over a much larger area than your first coat (depending on the situation, sometimes the skimcoat can be or is extended over the complete panel). With the skimcoat applied to a large section of the panel (it's OK if you've extended it out onto the painted surface of the panel or the complete panel at this point) and thoroughly cured, it's then time to begin another round of sanding using a sanding block or board. A rule of thumb in this case is the larger the filler area to be sanded, the longer sanding block or board you'll want to use. Again, 80-grit paper is a good starting point. Begin sanding the surface of the filler in long, smooth strokes that extend past the edges of the area coated with filler. You don't need to muscle the board; use a light touch and let the sandpaper do the work.
It's this sanding step of the skimcoat that will hopefully transform the area into a nice smooth section that'll blend into the panel surface itself. Use long smooth strokes and try your best not to sand any one area within the coating of filler-you want to evenly sand the complete filler surface. Sanding spots within the perimeter of the filler area will always cause you to create low spots that you'll have to attend to with additional applications of filler-a vicious circle you don't want to start.
With the skimcoat applied, cured, and slightly sanded (just enough to take off the skin of the cured filler), the next step is to switch to a finer-grade paper, say about 180-grit or so, and the application of a guidecoat. A guidecoat is a dusting of contrasting color applied to the filler's surface. I've always used a mist of dark-colored primer, though these days there are guidecoat products (both wet and dry) made specifically for this purpose. The guidecoat provides a contrast between high and low spots on the filler surface as you sand. When you sand over a guidecoat with a flat block or board (don't ever sand filler with handheld paper; the uneven shape of your hand behind the paper will always cause you to remove filler unevenly) the dark color of the guidecoat is sanded away on the high points and left as dark areas on the low ones, letting you know just where you stand in your quest for a smooth, flat surface.
Once you get to the point of a nearly flat surface, switch paper grades again to around 220-grit to minimize sand scratches and to finalize the shaping process by block-sanding the surface extremely lightly. At this point, a good wet coat of primer can be applied to the surface and, once dry, sanded lightly with 320- or 400-grit paper to finalize the repair and ready it for paint.
Working with body filler is like any of the other innumerable chores along the road to a completed project. But, unlike bolting on a component or welding on a tab or bracket, working with filler takes practice. Hopefully I've given you a bit of info and motivation here. Don't be afraid to give it a try; it's really not as hard as you might think-like I've said thousands of times in the past, if I can do it, anyone can.