Without resorting to airbrushing and stuff you can't practically do at home the best way I have found for touch up paint work is as follows:

Use factory touch up kit paint ONLY

NEVER bother with the included brush unless you are painting the groutwork in your bathroom

get the area clear of wax and whatnot so the rubbing alchohol (following a good/normal wash) or even some windex will do the trick

work only in a VERY well lit area

apply with one of the following: artist's ultra fine brush, wife's similar makeup brush (warning: can get you sleeping in the garage with car), or my personal favorite....a box of toothpicks.

The toothpicks (wooden please) can be used once and tossed. You can use the tip or break them in pieces to use the even finer resulting "wisps".

When applying the paint take the least you think will work and use 1/2 of that. Don't fill up the chip completely. Touch up, move on....when you have done all the chips on the car give the paint an hour or two to dry (more if its humid). Rinse and repeat till you have 2 or 3 goings over done. By then the chip should be pretty well gone. You can try the wet sand thing if you feel you must, but more often than not you can do more damage than was there to begin with. So unless you have experience wet sanding, leave it touched up as described. If done well (read: slowly and precisely) it should get it back 90+% of the way.

Hope this helps,
Lee