folks ocd about this i know but i dropped my phone (with a cover on) and i got a bump similar to this on the plastic part of the screen (not my pic...my chip is bigger)
iPhone 4 Scratch | Flickr - Photo Sharing!

would a bumper like this Play.com - Buy Griffin Reveal Case For iPhone 4S / 4 / Black online at Play.com and read reviews. Free delivery to UK and Europe! hide a chip in this area.

also is there any products to touch it up...or would sanding it down be advisable?

sorry to be ocd about this. if the bumper ive ordered would cover it thats cool with me

cheers

kevin