Normally I use a specialized cleaning solution and a very fine cloth, alcohol is not always great as it can damage the disk if the alcohol content is too high. The finer the cloth the better so you don't scratch anything. There are many products that advertise they restore scratched disks, but I find they're mostly useless.
If you scratch a CD and it becomes unreadable, there's not much you can do to repair it. Never heard of that toothpaste thing, I doubt it would work unless toothpaste is made up of 1s and 0s....
