Small random-orbit or pad sanders make this job go faster. (Wallis first covers these boundaries with Synkoloid patching compound so no edge is visible after sanding.) As shown, you want to make sure that there is a feathered, smooth transition from exposed wood to old paint. For areas that might get close scrutiny, you can follow up with a 100- or 120-grit rubdown to erase any scratches.
If less than half the old paint is left, however, it may be worth stripping it all off. Guertin gets rid of stubborn remnants using shrouded grinders (like the PaintShaver), infrared paint strippers (such as the Speedheater), or chemical strippers (like Multi-Strip), then smooths the wood with a course or two of sanding. When siding (or bank accounts) can't take the shock of a total strip job, Rich O'Neil, of Masterwork Painting in Bedford, Massachusetts, has successfully hidden rough, well-adhered paint under Peel Bond, a thick primer.
Safety First: When using a random-orbit sander, be sure to protect yourself from refuse with a respirator. For sanding by hand, a dust mask will do.