Well, I started the what is time out thread, because I think that people have hugely different ideas about what time out means. Given that, some of the things I'm going to propose here are things that I might call time out -- but it's pretty clear to me that most people here think that time out is that thing that Supernanny does.
To me a "gentle discipline time out" includes the following:
1) The attitude is "whoops, it looks like we need to take a break" rather than "you naughty child go sit over there". There is no yelling or scolding.
2) The child is within earshot or eyeshot of an adult, rather than a separate room upstairs with the door closed.
3) The ending point is determined by the child, and is based on how the child is feeling and behaving, not the clock.
4) There's no requirement that a child do X (e.g. apologize, admit their mistake, etc. . . ) it's not a power struggle, although that doesn't mean that we don't talk and connect after a time out.
5) Since the goal is to calm down and recenter, and many kids calm down better when they can organize around an activity, time out might be on the sofa with a pile of books, or with their lovey or whatever.
To give an idea of how a gentle time out might look -- I'm cooking something that involves repeatedly opening the oven door (let's say I'm basting a chicken) and my child is running circles in a loop from living room to dining room to kitchen and around. I ask him to stop, but he's having too much fun to slow down and listen so he doesn't, so I swoop him up (note, not carrying him kicking and screaming, if that happened we'd stop because I generally don't carry kids against their will) and we head to the sofa and I say "I'm worried you're going to get burned, can you think of something safer to play?" and leave. Usually that's all it takes -- I have his attention, because of the change of venue, and he'll either find something quieter to do (e.g. look at books on the sofa, or gets out the bucket of magnetiles that's by the sofa) or he comes back in the kitchen and says "I don't know what to do" and then I talk him through it and we settle on pretending to wash the dishes while standing on a chair at the sink.
A less "gentle" time out, but one that's still within my repertoire, would be if my son did something that was outside of my family value system (as opposed to badly timed, or overstimulated like the example above). It would have some of the elements above, but not others. Imagine that my son had hit someone. I might take his hand and silently lead him to the sofa. When we got there, I'd have him sit and get down on his level so my eyes are facing his. I'd say quietly and firmly, "In our family we don't hurt people. Come find me when you're ready to think about a way to play that doesn't hurt people", and then I'd walk away. Usually in a minute or two I'd hear him coming and then we'd have a conversation and I'd ask him to figure out away to "fix" what happened -- apologizing, explaining to the person why he was angry and promising to use words next time, finding a quieter game to play, telling me his plan for next time etc . . . it's not "sit there until you apologize" but he has to show that he realizes that next time he needs to make a different choice.
To me (and again, lots of people have different opinions, but this is my definition) time in, involves pulling the child physically or emotionally closer to you. I don't think that time out necessarily involves pushing your child away, but sometimes I want to bring them closer, or I just think he needs adult support to get it together. Time in, in my family, might look like this: He's tantrumming because I set a limit, and I lead him to the sofa and just sit quietly next to him while I wait for him to calm down. When he's done he usually comes over for a snuggle. It might also look like he's getting in to mischief with the art supplies (say dumping glitter everywhere and coloring on the floor) so I ask him to come work at the table where I'm paying bills.
I should note that all my examples are from when my son was under 5, because that's when I used these techniques with him.