What's that you don't see? Nail holes! I went nuts to get perfectly smooth trim when we replaced all of it in our house mini-remodel. It seems so simple, so easy to putty and paint, but those holes are really hard to hide completely (really, look at your friends' houses). I figure I filled about 800 nail holes, caulked 850ft, and painted about 600ft of trim.
Here's the step-by-step guide on how to get deliciously smooth, invisible trim.
The problem with common trim is that it's typically made out of MDF (medium-density fiberboard), so any bit of water will make it balloon out like pressed wood. You can't simply slap on pink putty and paint. My painstaking method took 3 days to complete a section of trim.
Spray or brush paint the 16ft boards. They're already pre-primed but a good coat now will make it easier on the baseboards since you won't need to cut perfectly to the floor.
Cut the baseboard or trim piece to length
Nail gun the baseboard or trim to the wall
Caulk the seams. From here on out, use a headlamp all the time--really helps see small imperfections. I found it best to caulk a length of board and getting an ample amount of caulk on there. Then quickly come through with a damp finger to smooth. You'll waste like 2x the caulk.
Sand the nail holes since they mushroom out from the nail gun. I used 220grit sandpaper on a sanding block.
Vacuum dust out of nail holes and wipe down with a slightly damp cloth. If you leave the dust from your sanding in the holes, it'll expand when you putty the hole and you're back to mushroom.
Put lightweight putty in nail holes and let dry overnight. Don't use the heavier pink putty--that works better in drywall. The lightweight putty will mushroom less.
Sand putty holes
Repeat putting a coat of lightweight putty on the holes again--often the putty will collapse in and won't be perfectly flat. Let it dry (less time than overnight) and sand again.
Lightly wipe away dust with damp cloth.
Run your fingers over the trim with your eyes closed. If you can feel anything, you'll be able to see it when you're done. Re-putty if needed. Here's what a ready-to-paint hole typically looks like. The edges of the mushroomed nail hole are sanded off, the putty is perfect with the wall, and your pre-painted board is pretty sanded.
Put oil based paint over the puttied areas and exposed ends of MDF to seal it. Let dry. The oil seals the exposed pressed fiberboard, else the latex paint will mushroom it again.
From here, use your favorite method to get a perfectly straight wall-trim paint line. I did it with tape and a double-cut method since painter's tape doesn't block paint perfectly, especially on textured walls.
Ex: If your wall is red and trim white, paint over your trim like 1/2" where they meet the wall with red. Let it thoroughly dry overnight and put painter's tape on the wall at the seam. Paint the edge of the tape with the wall color to seal the tape (shown below on the lower right of the picture before the white's painted).
Paint the trim with 2 coats of white, being careful not to paint your newly refinished hardwood floor! Peel off the tape while the 2nd coat is still wet. I found it best to peel off the tape at a very sharp angle.
It was a ton of tedious work but the crisp lines were worth it!
If you're in the San Jose area, FMD Distributors (floor, moulding, doors) is a great place for material at contractors' prices, a fraction of the cost of Home Depot or Lowe's.