This thread is very interesting an I appreciate BOTH sides of the coin.  I have a generally very good natured 3yo boy and time outs have worked well for us this past year.  He is warned that he will get a time out for continuing to behave in a way that is hurtful or dangerous, and if he proceeds he gets a time out...2 minutes at the bottom of the stairs...I tell him what he did wrong, I ask him to say he is sorry, we hug...over...great.  Well not so much anymore, lately...