I agree ABSOLUTELY...you should NEVER hit your child to teach them that hitting is wrong. Think about the message that sends. I'm surprised someone would suggest that to you. We've been working on using our language telling our son to be gentle first and foremost (telling him what we DO want from him so he knows what actions he can use) and also helping him learn to use his words. He is almost 2 1/2 so a little more verbal than yours probably. We do tell him no, and we do put him in time outs, usually after telling him, if you do that again, you will go in time out.
Whatever you do, be consistent. And know that it will take a lot of time before she gets it and can start controlling her impulses. We have just started to see our son pause sometimes before hitting and actually stop himself from hitting. So take heart, it will get better! Just keep your calm! She's not being defiant, she's learning to express herself and doesn't have good control of her impulses...and needs to be reminded again and again and again...
L.
Stayin Home and Lovin It! You can too!
http://proud2be.stayinhomeandlovinit.com