J.G.
I also use 1-2-3 Magic. But I have also taken a page from Super Nanny on how to do timeouts. There are different methods, but basically you keep putting him or her in the time out spot until they stay for the allotted time. My daughter tested me on this a few times, but now she stays in her time out spot. (I believe Super Manny on ABC (fridays) also demonstrates this rather well).
Another book I have taken some discipline pointers from is The Kazdin method for the Defiant Child. It focuses on postive reinforcement. Basically time outs are for stopping behaviors but positive reinforcement is used for changing behaviors.
Really with either methods or a combo it is about being consistent.