Hi Mickguard,
FWIW here's how I've been finishing my guitar with Tru-oil...basically what it says on the instructions.
I sanded to 800 grit, but that may be overkill.
I wanted to keep the wood look so I didn't grain fill, but I did fill some worm holes with epoxy.
I wiped the tru-oil on as thin as possible, let dry for 2 hours between coats. 24 hrs before sanding if it's necessary after a few coats. More thin coats (I'm up to about 8 and final now), then I'll wait 24 hrs before final polishing.
You can get a pretty good shine out of tru-oil, and I don't think it soaks in like the other oils (AFAIK).
I'm going to go to high gloss on the body and headstock, but I'll actually want more of a satin feel on the back of the neck, so I'll have to sand it to get rid of the gloss that's there naturally.
I hope to have some photos up in the next week.
Regards,
Brian.