I bought a kindergarten nap map and put it in our front room (no toys, TV, ect..)and turned the timer on the stove (one minute for every year). When my daughter needs a time out, I pull out the mat and lay it down. She knows to stay on the mat until the timer goes off. Then we talk about her behavior and she says she is sorry. We hug and kiss and go on with our day.
Sounds easy....well, not at the beginning. The key is consistancy. Everytime she gets off of the mat, put her back on and start the timmer over. It will take some time but stick with it. Your child will eventually get that you are not coming back until they do what you ask.
Now when my daughter is frusterated, she will tell me she needs a time out and get her mat out herself. She lays down until she feels better and then goes and plays. We started when she was one and now she is almost 2 1/2.