Hi Kevin,
Cut nails on a varied-width plank oak floor is one of the nicest looking hardwood floors a person can have in their home. It provides a beautiful rustic look, especially with a nice stain.
Before tackling a project of this magnitude, you must first "Nail-Set" every cut nail below the surface of the wood. I would buy a very good nail set and a good pair of knee pads (Troxell are the best kneepads).
You will tear up your big machine sander very quickly and go through way too much paper. If you do hit a cut nail with the paper, you must replace it asap. Once a tear has been made in the paper, the machine will leave lines all the way across the floor.
The bevels will never completely go away with sanding, therefore the darker areas between the boards will be better to match with stain closely resembling the original color.
I would also rent an "edger" to sand the perimeter of the room using the same grit process you do with the big machine. A typical sanding job will be 40-grit for the first pass and then 80-grit, buff with a pad and 120 screen on top, then apply first coat of stain. You may also use 50-grit then 100-grit if 40 seems too aggressive, but I'm assuming 40-grit will be just fine.
To get the stain even throughout the floor, work in sections being sure to apply with a lambskin applicator (
http://www.homedepot.com/p/Applicator-and-More-10-in-Lambskin-Pad-with-Block-11001/100585512).
Wipe it clean with cloth rags right way and let the color soak in the floor overnight.
The next day I recommend sealing the floor with BONA Drifast Sealer.
Bona Woodline Oil satin polyurethane after the sealer, and then buff with 180 or 220 screen.
Apply final coat of Woodline Oil poly. I prefer to wait overnight for each coat.
I hope this helps, and best of luck on your project!
Dustin Deslauriers
Everwood Flooring