In my opinion, timeouts are the most powerful, humane punishment that can be used for dog training. I never agree with physical punishments, partly because there are just as effective means of humanely teaching a dog.
I got a sad call from a new client yesterday. She said her dog was showing signs of dog-dog aggression and, from the advice of someone in the dog park, she hired a trainer that uses choke chains. She said initially the training wasn't too physical, but she ended up firing him because of his increasingly abusive techniques when dogs were around her dog.