I'm a big believer in natural consequences where appropriate.
If the situation requires intervention on my part then I usually just use distraction and explain why she can't do whatever it is I'm telling her to stop doing. For example, if she's upset that she can't do something and starts hitting me, then I will hold her hands gently and tell her that we don't hit, it hurts mommy, etc. Then offer her something else to do.
I don't agree with physical punishment and I think there has been plenty of research to suggest that it's simply not an effective form of discipline.
I'm not a fan of timeout for my daughter at this age (she's only 2.5). I don't think it's really age appropriate and I prefer to stay with her and help her work through her emotions as opposed to sending her off to a corner by herself (though I do still remove her from the situation; ie. if she's playing with her friends and is being rough after I warn her not to be, I'll take her away from playing so she knows that that behaviour results in not being able to have fun with her friends until she calms down).
I've noticed that so far she responds best to natural consequences, like if she doesn't want to put her mittens on when it's cold out then I'll say "okay, let's try walking without the mittens." She then realizes that her fingers get really cold and uncomfortable. When she starts complaining that her fingers are cold, I acknowledge it and say "Yes, your fingers get cold without mittens. Would you like to put them on now?" And she says yes and is happy to put her mittens on from that point on. I'm sure there are children who don't respond to that - but mine does, so that's the best form of discipline for us.
I don't think there's any 'one size fits all' method as children are individuals and will naturally respond more to different approaches. I think the key is to keep in mind that the goal of discipline is to *teach* your child. Ask yourself if your kid is actually going to learn something substantial from the way you're disciplining them. In the case of spanking/hitting, I don't think you're teaching a child anything about the actual situation, just that they should be afraid of pissing you off.