Thanks for your input! After some research, I went to a local Target store and bought Meguiar's SCRATCH X for about $7.99 and a microfiber towel. After rubbing the affected area with Scratch X for about 2~3 minutes, I let the compound dry up for about 15 min. Once the compound dried to a white haze, I wiped it with the microfiber towel. Now I can't tell where the spots were! I am amazed at what Scratch X could do!
It even got rid of scratch mark left behind by previous attempts with clay bar.
Anyone with water spots or bird dropping etch problems, give this product a try.
http://meguiarsonline.com/forums/sho...&threadid=4891
Mine looked like type II water spots.