Highly aggressive pads used for cutting or heavy compounding and removes extreme swirls or oxidation on very hard paint. It removes heavy oxidation much better than foam pads and generates less heat resulting in cooler surface. That said, wool is also safer to use on heat sensitive parts of your car such as bumpers and spoilers. The caveat is that it can leave buffer trails if you are not skillful enough.

Wool pads are often thought of as “cutting” pads because they are more abrasive than foam pads and cut deeper into paint layers than foam pads can. Unlike foam pads, wool pads can remove deep scratches, thick layers of dirt, and other debris that may have accumulated on the plane's exterior surface.
The three types of wool pads are four-ply, blended and finishing pads, and each of these pads have varying levels of abrasiveness. For example, four-ply is considered to be the most aggressive of the three, while finishing pads are made from soft, natural fibers, and are ideally used for finishing the polishing job. Finishing wool pads are often made of lambs' wool, which contains a natural oil called lanolin. This type of wool pad is a bit more expensive than the others, but many aircraft owners think they're worth every penny because of the natural lubrication lanolin provides.
It's recommended that you use a wool pad in the beginning of the polishing job to remove any wax or sealants that have been applied to the surface. Using a wool pad to cut into the finish and get down to the metal is much more efficient than using a foam pad, which would take a lot longer to do the same job.