You might be referring to [link=http://www2.towerhobbies.com/cgi-bin/wti0001p?&I=LXB355&P=7]Balsarite[/link]. It helps covering stick better and can also be used for fuelproofing. I have used it before with good results. And yes, sanding the entire airframe with progressively finer sandpaper will help ensure a smoother final product. Also, do your best to remove all sanding dust from the airframe and finally, try to cover in a clean, dust-free environment.

Hope this helps....