Ditto.
We still do the timeout thing for relatively minor things, but save the butt whoopin' for really bad things like deliberately hitting their siblings, or outright angry and disrespectful behavior.
One GREAT way to discipline kids is to simply threaten to take their favorite toys away. If they throw a toy while being in an angry fit, that toy will 50% of the time end up in the dumpster or Goodwill (depending on how beat-up/cheap it is) the next day, depending on how really attached they are to the toy.
They know that if they throw things those toys go away.
Same thing for toys that they fight over. I will tell them to work it out, and suggest a reasonable alternative, but if they still can't work it out, the toy goes into "toy timeout" for the day. If that doesn't work then that toy ends up at Goodwill too. Better to have peace and a willingness to work out a sharing routine than a toy that they endlessly fight over.
The thing to remember is to ALWAYS make them understand why they are being punished, that it is the behavior we don't like, and that we still love them 100%.