Well, I have an 11 mo, so I don't have any experience, but I have read a lot of parenting books. lol
I have to admit I like the idea of time-out, if it's used as a cool down time, and not a punishment. Like asking your child to sit on the chair (with you sitting next to them if they prefer) and take a breather. I have a VERY ap friend who does this, and its not used as a punishment at all. Her 5 year old will decide on her own that she needs to chill out. That goes for parents too!!
I do not like the idea of time-outs used to deter behavior (if you do it, you will get a time-out). And I like even less the use of a "naughty chair" eww. Anyways, that's just imo.
Here are some links to time-out articles that might help.
The Case Against Time Out
http://www.naturalchild.org/guest/peter_haiman.html
The Disadvantages of Time-Out
http://www.awareparenting.com/timeout.htm
Ok, that's all I can find right now from the sites that I like. HTH! and good for you for being so caring

I would also like to add a few books that I like with info on discipline
Becoming The Parent You Want To Be by Laura Davis - I know I recommend this one a lot, but I really like the discipline section, and it's not the type of book that would turn many parents off.
Also, Loving Your Child Is Not Enough. This is directed at older kids, but the same principles apply.
Becky
Keagan 11 mos