Before glass is applied is the easiest time to get the underlying surface fair. I'm a fan of longboarding hulls that will be painted (I use a 4" x 24" piece of 1/4-3/8" ply -try a double layer of your hull material, with wood handles glued to the backside, and a 60grit sanding belt cut open and spray-glued to the face). Use a carpenter pencil and draw squiggles all over the hull, then using mostly fore-and-aft strokes let the longboard tell you where the low spots are. Before glass, you can use either lightweight (talc-based, e.g. West's 410) fillers, or even cheap and quick stuff like "bondo". The longboard won't work near the boat's ends due to the twisting that happen there- I use a 3M hard rubber sanding block there.  Repeat the pencil trick a couple times until there aren't any areas that remain un-scratched by the longboard.After the surfaces are fair, use the lonbboard to radius the chines and keel line, using the full length of the board and long diagonal strokes across each corner.

You can use the rubber block and maybe 80-100 grit lightly over the hull surface after the longboarding, to smooth things just a little more and make the glass less likely to snag, but otherwise there's no need to sand further before the glass.

After glass, use a fairly thick application of phenolic micro-balloons (the brownish-purple stuff), about the thickness of drywall mud, and use a 6-9" drywall blade to apply it thinly over the entire hull, filling the weave in one coat and using minimal epoxy to do so. Ligtly sand the inevitable goobers and ridges, then roll on a syrup-thickened layer or two, perhaps tinted black with graphite dust, then wet-sand these layers back with the hard rubber block until you're seeing about 20-30% of the purple-brown color peeking through. Spot-spackle any minor areas of concern, sand, and begin priming and paint.

Wow.  A lot more intensive than I imagined.  I did't do any sanding for the inside of the plywood hull and the FB cloth stuck well to it with one coat to fill the weeve.  I thought I could do the same (nothing) for the fiberglass cloth and epoxy for the outside.  The extra step I thought was making sure the weeve is completely filled and sanded nicely then apply the primer and take my time making the primer fair.  Finally the paint using brightsides marine paint.  So all in all you still suggest I do the thourough sanding upto 100 on the bare plywood?  I do have the micro balloons but its not purple.  It's a dry white power stuff.  Do I mis it with epoxy to a drywall mud consistancy?  Can I use that instead?  Then use epoxy with the black dust?  Follow that with my white primer?  Just trying to clarify your answer, thanks.   

Fairing the hull is an option, one that I think has real benfits. Not everybody agrees- the standard instructions would have you lightly pass over the wood with an RO as you round the edges, and go straight to glass, then a couple coats of straight epoxy to fill the weave, more RO, then primer and paint.

What I describe will cause the hull to pass a reflection test- a linear object (overhead flourescent tube, or a nearby telephone pole, etc.) reflected in the hull will appear as a smooth curve, rather than a squiggle. Many hulls have pretty significant dips and mounds in the run of their surfaces, and if this is something that you will notice and want to correct, now is the time.

White micro balloons are probably fumed silica- not what you want for a filler since it sands like stone. Phenolic is cheaper, lighter, and sands at least 10x easier. The black graphite powder is optional- just a colorant int his case, to create a guide coat to let you know when you've sanded too far.

I prefer to get the surface 99% right before I add primer, so that there's a real chance that it will be 100% right by the time I sand the primer.

Now that is what I am looking for.  I will be rereading your advice multiple times becaue I want that mirror look.  Thank you very much