I watch Super Nanny sometimes and she explained her method for time out. It has worked for my kids for years. Below is the way we do it.
When your child does something unacceptable:
· Go down to their level
· Make eye contact
· Tell them they did something unacceptable
· Warn them that if they do that again they will go to the Naughty Chair
· If the bad behavior is repeated, take the child and sit him in the Naughty Chair
· Explain why they are sitting there and to stay there until you come and get him
· The length of the time-out is determined by their age: 1 minute X their age. A timer would be useful here and a visual indication for the child to watch the time go by.
· At the end of the time-out, the child must apologize.
· For an older child, they can go to a “Naughty Room” that is not their bedroom and does not have a TV or other activities; it has to be a boring place.
· For a younger child, the time-out should take place in a “Naughty Chair” that is placed close-by the main play area, but again not in a bedroom or eating place. The first step of the stairs, if you have stairs, is a good place for a toddler.
· Either way, you cannot associate a time-out with a place where they sleep or eat or play, or else they will refuse to sleep, eat, or play there.
I forgot to add that we keep taking them back w/out saying anything and their time there does not start until they stay there.