Wash off any dirt and flaking paint from the siding with a garden hose, taking care to point the water downward whenever possible.
Scrape off any loose paint with a paint scraper. Use an electric sander to smooth the edges of the clapboard.
Inspect the siding for any wood that has rotted out. Sand over any small rot damage. For more significant damage, pry out the rotten wood. Fill in the area with epoxy wood filler. Allow the filler to dry and sand over the area.
Sand the siding with a disk sander and 36-grit sandpaper.
Sand the clapboard again with 60-grit sandpaper and a random-orbit sander.
Apply a new coat of paint or stain to your siding.