I've tried the 'naughty corner' and I definately vouch for it. I'm not sure if my daughter's personality was determined/stubborn and noisy or it was just the regular 'terrible two's' because she is quite a docile, content and co operative little lady now. (at 5 years). When I started the naughty corner I had just finnished my Montessori course so I was totally into the 'follow the child' theory. It seemed really harsh to me at first. I had never been punished like that as a child. Still I had seen enough videos on child psychology to have enough faith that it wasn't damaging (some books do quote that).
After checking a lot of places to see what she could understand - I only punished her after repeating in a strong firm voice (not shouting, and not a sweet voice) that her behaviour (state the behaviour) was unacceptable. Then she got a warning (mummy will put you in the naughty corner if you keep this up) and then she went in there if she knowingly disobeyed.
You can't punish children for things they do not understand, or tried but failed, or were confused about. Only genuine disobediance. 2 minutes for a two year old and 4 minutes for a 4 year old 6 mins for a 6 year old. Not more than that because they forget what they were there for. Before they go into the corner you need to tell them why they are going and also that when they are ready to say 'sorry' (sincerely) they may ask you to come out. Listen to them when they say that .... explain that means that they must not do it again ... (they may need to visit the naughty corner a few times before they can remember not to repeat offensive behaviour ... that's normal) and give them a gentle hug and some reassurance that you have faith that they can do it. This is not the time to hug them and try to ask their forgiveness for not being the ideal mummy .... although you may feel like doing just that. I did ...!!!! This is time to show that you love your child, you forgive them and will give them another chance.
The naughty corner was great for us .... We started off with my daughter in the corner 5 times in one day .... and over time it goes down rapidly (you really have to be consistant with it) and now we haven't used it in years. Basically because we don't need to.
It's not nice to humiliate children so I never did it infront of people. Also you need to give a good margin for what we 'think' is bad behaviour verses what che child is capable of following at that age. You need to have daddy and grandparents all on the same page if this is to work or else the child gets confused. My husband is too gentle and left all the punishing to me ... but it worked fine because my daughter sees me as consistant authority ...
Coupled with firm rules, lots of affection and attention, and balance in all things I've found that the naughty corner worked fine and was much better than yelling and even constant explaining. Just as long as you manage to have lots of fun and laughter when your child is behaving well. :)