I prefer to use a diamond coated file (mine is on my Leatherman multitool).
These files are of a VERY fine grit and will not cause your cube to scuff.
There is a danger in using too coarse of a file (or sand). You could create deep surface abrasions (scratches). These most certainly would catch against other abrasions and would slow your cube down.
Here is how I prepare my DIY cubes, and they are SO smooth, they fly!
I find it necessary to use the diamond file on the DIY cubes I bought. I check every piece and the ones with a very bad seam on the internals, I will file down the seam. I do not do every piece, only the ones that need it.
I assemble the cube and pay attention to tightening it enough so that it seldom pops in my hands when doing aggressive speedcubing moves.
I then work in my cube (without lubing it) for about an hour or two. I really work it hard too! The purpose is to get the unlubed pieces rubbing each other. After enough rubbing they will wear each other smooth so that any manufacturing defects are evened out slightly.
After breaking it in, I completely disassemble the cube (except the centers), and do my own little trick:
I pull all the centers to ensure that they have an even amount of "give" in them. I fine tune the centers to make sure they are all roughly equal tension.
I find that doing this after I make sure it is tight enough not to pop ensures that not only is the cube stable, but that all the sides turn with even resistance.
Before I reassemble the pieces, I use an eyeglass cloth the completely wipe them off. This removes the very fine dust that is created when breaking in the cube.
I reassemble the cube, and lube it as the last step (except putting on stickers). I work in the cube with the lube for several minutes, then I wipe off any excess lube from the outside of the cube.
I have assembled many DIY cubes in the past year. I find that this method ensures the smoothest and most reliable cubes that I have found yet. I have however seen cubes which have less than ideal spring lengths. There is little you can do except put new springs on if your springs are too long. A friend tried cutting them unsuccessfully (he could only bend them not cut them with his scissors) and made them worse. He had to replace the spring with a spare he had.
I would be reluctant to recommend using sand, as you may not get a fine enough grit not to damage your cube and make it worse. I diamond file works amazingly for me with absolutely no scuffs or scratches.
Hope that helps (sorry for the length).
