What should I use to apply Tamiya Compound

Well since my Compound didn't come with a cloth or anyting, I don't know what I should use. How much should I apply to a model, and how will I know when to stop.:)

I use a soft cotton cloth. When do you stop? When you get the results you want. If you go throught the paint you went too far. ;)

Also the paint will rub off on to the cloth as you polish and clog up the rag. Keep using new parts of the cloth as you go.

Uhhhh, honestly what does this compound do??