Joe-
The first thing you need to determine is if the spots are ON the paint or IN the paint.

Carefully feel the paint surface with your fingers (after washing, etc). Do you notice ANY roughness whatsoever where you see the waterspots? If so, you need to clay the surface to remove the spots because they are ON the paint. Use either Clay Magic or Meguiar's clay. I like Clay Magic better because the Meguiar's clay is too soft. Be sure to coat the surface first with Final Inspection or Quick Detailer prior to rubbing the surface with clay. (just follow the instructions that come with the product).

If the surface feels PERFECTLY SMOOTH then your problem is IN the paint. The best way to attack this is by starting with the least aggressive method and gradually use more aggressive methods until the problem is resolved. You DO NOT want to be any more aggressive than you have to.

1) If you haven't already tried something like Meguiar's #7 polish. Try this first.

2) Next try Meguiar's #9 Swirl remover. This can be applied by hand or with a buffer but, the buffer really works much better. This is a heavy duty cleaner that will remove most anything but, it's still safe to use.

3) Next try Meguiar's #2 Fine Cut Cleaner. This product must be applied with a buffer. Use caution, you are actually removing paint with this product! This is as far as I would go as a non-professional.

If you get to step #3 and still have spots then you need to take your car to a professional. You don't want to cause more damage.

Once you finally get rid of the spots make sure to apply a good coat of wax and keep your car waxed. Also give it a quick spritz and wipedown with Final Inspection after washing each time to prolong the wax. If the Final Inspection begins to streak, then you need to rewax.