Yep, he is right, it looks like the Harbor Freight rotary is down to $24.99 again! The sale seems to be quite frequent, so don't fret if you miss it this time. I think it was about $10 shipping and handling for me, so about $35 out the door. It takes a while to arrive too, but thats okay, mine got here eventually!
I know I shouldn't be recommending against things I hafven't tried, after all, they could be the best thing in the world, but....
If you do go this route, I'd recommend getting a smaller velcro backing plate (it comes with a 7" velcro backing plate) and some pads to match it. Then again, maybe you'd rather just go to a local Paint and Body store and get a 7" pad, use the included velcro backing plate, and get some decent polish for now.
For what its worth, I have one of these orange beasts and it is pretty decent to use. I haven't gotten used to the slow speed start thing yet (haven't used it all that much), but it really isn't a problem. Its pretty fun to use because it gets more work done quicker than a PC.
I haven't been able to produce a swirl-free finish with it alone, yet. I usually polish with it, then wax, and a few days later see buffer holigrams...then I'll go over it with the PC and it will be just fine. They say it can be done, I bet I could with more practice and time and different polishes.
I would also guess that the areas you pictured are clear coat failure. I'd also bet that if you used a rotary on it, it would help some. It looks like the surrounding paint would show significant improvement if a rotary ran over it. On my dad's old truck, I ran the rotary and turtlewax over it with a polishing pad and it showed a significant improvement. I bet using a polish alone would have been even better.
Blah, enough babble...In summary, I find my Harbor Freight Rotary to be more fun to polish with than my Porter Cable. I usually find my PC necessary to remove the trace holigrams however. I also like my PC for waxing; I find it to apply a better coat than by hand. For people like you who have a vehicle that needs considerable paint restoration, I recommend the Harbor Freight rotary, especially considering its low price.
Check it out at their site:
http://www.harborfreight.com/cpi/ctaf/Category.taf?CategoryID=105&pricetype=
Kevin