...polyurethane IS varnish. The difference is that it uses polyurethane resin rather than alkyd or phenol resins. It is the same type of finish in that it cures through a chemical with oxygen in the air and the cured finish cannot be disolved by the thinner that is used in the uncured product. Multiple coats do not chemically bond with each other. Cured polyurethane is very durable. There are other differences in it's properties vs. other varnishes. For more details, pick up a copy of Understanding Wood Finishing by Bob Flexner; it's a very interesting read.

FWIW, prior to reading the book, I thought that polyurethane was some form of plastic finish and that varnishes were something different. I also thought that oil finishes were waterproof and that mutliple coats of oil would re-dissolve each other and blend. The book dispells these common misonceptions and explains how finishes work and what the pro's and cons of each are. It explained some problems I had run into and has prevented me from making mistakes in the future. For me, it was definitely money well spent.

Speaking of price, Woodworker's Warehouse has great prices on books.