The 3 most common materials used for making stems are vulcanite ( which can oxidize ) if not maintained, ebonite and acrylic. All three I use different grades of micro mesh, up to 12,000 grit. Also use white diamond or pure carnauba wax with my buffing wheels. I prefer ebonite or acrylic, they hold the shine, last and clean easy. I've also used lucite with good results.
Vulcanite and ebonite are both hard rubber acrylic is just hard plastic. If you have any aversion to the smell of burning rubber then stay away from the first two. Cumberland and brindle stems are also a form of vulcanite or ebonite. Lots of good choices out there regardless of which way you go.
Vulcanite and Ebonite are the same thing, really. They are both vulcanized rubber.
There's a lot more than just acrylic. I have made stems out of acrylic, polyester, juma and a few others. Some are harder to work and sand than others.
With a few exceptions you really can stop sanding at 600. Especially if you wet sand from 320 up. It really depends on how much you want to sand and how you want to sand.
As far as buffing, I use Tim West's green compound, followed by red tripoli and then white tripoli.
A note on buffing compound. DO NOT be tempted to think of the grit number given to buffing compound as the same thing as the grit number given to sand paper. If you sand a stem to 1000 and then buff with green you ARE NOT taking a step backwards. Sandpaper and buffing compounds work differently and cannot be compared in any way. If you have a buffer, and different buffing wheels for each compound, go ahead and use them in the order you would on anything else you are buffing. (I like the Beall system).
True, both vulcanite and ebonite are in the same rubber family, ebonite is far superior and harder. Bowling balls are made from ebonite. I have used Cumberland and horn on a few different pipes with great success.