Last week I refinished my 80-year old wood floors, and they were worth several days of work, and a week of staying at my parents.
This website was of invaluable help (recommended by my uncle), and I followed pretty much the same steps. It's best to put the varnish on during the day, or at least with plenty of bright light. Putting coats on in the dark is a recipe for disaster. I cannot stress this enough. Invest in a Mouse by Black & Decker hand sander. It's great for getting into all of the low spots and corners. We actually went out and bought a second one to speed things up!
1. Varathane EZ four-head orbital sander, rented from Lowe's for $35/day (two day rental)
2. Four gallons of Varathane Oil-Based Satin Finish for floors (used liberally, discarded quite a bit at the end, really 3.5 gal)
3. Two palm sanders, two Mouse sanders, plenty of 60 grit sandpaper
4. 12 packs of 36-grit, 6 packs of 50-grit, 2 packs of 80-grit
5. Four lambswool applicators
6. Two dropcloths
7. One pack of 120-grit or 150-grit for scuff coats
8. 12 two-packs of tack cloths from Lowe's
9. Four varnish brushes
10. One large back of chocolate
11. Two parents, one sister, and two friends to help
We sanded for two days, starting with the 36-grit on the floor sander. We probably should have stripped off the old old varnish, but instead spent a day trying to sand it down. That included standing on the orbital sander (not safe!) to really cut into the finish. Once we got the finish off, it was smooth sailing. Again, the Mouse sanders were really the best tool to knock down the high spots and dig into the low spots.
We put on four coats, letting it dry at least 24 hours between coats. This is longer than necessary, but because of my day job, this was our only option. I do recommend giving it ample time to dry to prevent hazing or crackling. I stayed at my parents house while the varnish dried- since it was oil-based, the fumes were extremely strong. My throat tasted like burning for hours after each coat.
All in all, the process took over a week. Two full days of sanding, and then around two hours a day for four days to varnish, then three days to cure.