In my kitchen I have a maple veneer strip of wood in front of my sink which is approximately 4 inches by 10 feet.  I think it has a lacquer finish on it which was done badly and is wearing off in spots.  I would like to find the easiest route to touching this up before it gets damaged by water splashing from the sink.  Could I just buff it up a bit with sandpaper and recoat it with water based diamond coat varathane or could I just touch up the areas that need it?  I have asked around and some say I have to use lacquer again if that is what is on it and some say all I have to do is buff it up a bit and then I can use water based varathane. I am worried about how much I can sand the veneer without damaging it since it is a difficult piece to replace.  Does all the old finish have to be completely removed in order to refinish it?   Is paint on lacquer hard to work with and toxic to breathe in?  I have heard that too.  I hope you can offer me some advice since I am totally indecisive.

Wood veneers are a little fussier to re-finish than solid wood materials because they cannot take the same amount of sanding and preparation often required to achieve a high quality second finish. Although I am not an expert in wood re-finishing some previous mistakes come to mind. I would suggest from these errors that you should remove the entire old lacquer finish from the veneer. If you try to re-finish wood in localized areas it is very likely that the old and new finishes will not blend. You may try applying a good quality paint stripper to reduce to a minimum the amount of sanding or steel wooling required on the veneer.

Once the veneer is bare, smooth and ready for re-finishing, consider re-staining the wood with a product that penetrates and seals the wood like Watco Danish Oil, Minwax, Tung Oil or Varathane oil. I prefer theses products because they can be re-applied and touched up as required without stripping and re-sanding the surface again.  An alternative is Circa 1850 Antique Paste Varnish which is a long lasting and hard finish and can be patched. However, I have found it more challenging to apply. Also, consider consulting an experienced paint supplier because their experience and knowledge of old and new products may be invaluable.