Because every child is different, be aware that time-outs just don't work for some kids. For others, it's pretty effective. The ideal is not to punish, but to give the child a chance to reset his emotions if he's upset and acting out, or to consider why certain behavior isn't acceptable.
With that in mind, some parents and child psychologists believe that there's nothing to be gained, and a great deal to lose, by a "punitive" approach. Especially if it turns into an extended struggle, with the child repeatedly escaping and the parent repeatedly dragging the child back to the time-out spot and starting the clock again. This becomes terribly h*** o* both the child and the parent, and since the idea is to help the child understand self-control and find calming alternatives to his behavior, what's the point? Both parties end up furious, upset, and often crying – about the punishment.
Only a few iterations completely loses the original focus and turns the whole affair into a battle of wills. The parent, in that case, thinks she MUST win, and the only way to accomplish that is emotional and physical force. A child who's just beginning to understand himself as a separate being with separate desires and motives is understandably confused and frustrated by a setup that seems to set his parents against his most basic needs.
That can have several possible outcomes. Two of the most common, with which I have personal experience from my birth familly:
1. It can create an understanding in the child that he will be able to win when he gets big enough or devious enough, and the child works toward that end result, with either outwardly expressed disdain and rage or inwardly guarded anger. (This was a younger sister of mine, who has had a seriously dysfunctional life.)
2. It can establish an understanding that parents don't care about his feelings and needs, which can result in a sad, withdrawn and uncommunicative child who believes he's not worthy of respect and care. (This was me and another sister, who have had years of work to overcome painful self-esteem issues.)
Those are outcomes of time-outs (and other forms of punishment) gone wrong. But this approach does work for some children, and is better than some alternatives. In my best understanding, the time-out is a "safe" time for the child in which he is given a supportive opportunity to deal with frustration, disappointment, anger, or inappropriate behavior.
A quiet spot near the parent, on the couch or a chair near where mommy's working in the kitchen, are excellent locations. Quiet conversation may be desirable and completely appropriate. Sending a child to his room may work if it's not a punishment – even if he forgets while he's there and starts playing, that's fine if the point was to get into a better mood. But some kids will find being sent away from the parent to be an unbearable rejection, and the suffering they experience may be totally out of proportion to the misbehavior.
After the time-out, usually about one minute per year of the child's life, you can help him reflect on a more desirable behavior than the one that stopped his play. Help him understand what his alternatives might be; using words instead of hitting or screaming; asking for help if he's frustrated; finding something else to do if he's asking for something he can't have (and parents really would do well to provide those alternatives before the meltdown); etc.
Many parents require the child to apologize after a misdemeanor. I personally think this is teaching the child to tell a convenient lie so he can get back to his play. It is fine, however, to model, early and often, the civilized art of apology. Just as with any other courtesy, children learn best by seeing, hearing, and receiving those courtesies.
So, what if your child doesn't seem to be one who benefits from time-outs? There are two related approaches that I find to be sane, compassionate, encouraging and positive. For younger children, I'm impressed by the approach used by Dr. Harvey Karp in The Happiest Toddler on the Block. You can find a whole set of videos and interviews on this in youtube if you'd like to see this alternative in action.
For more verbal kids, I can't recommend strongly enough the wonderful book How to Talk So Kids Will Listen, and Listen So Kids Will Talk, in a clear, easy-to-read cartoon format. Though it's non-punitive (in the forceful sense), this is not parent-as-pushover stuff. You'll be glad you tried this approach!