When my daughter misbehaved, I'd take away a favorite book or toy for a period of time--usually a day--and leave it in plain sight. When she'd ask for it, I'd remind her why she lost her book or toy ("No, you can't have it because you tore Mommy's book") but without screaming at her that she was BAD. Even at three, she could figure that out. Spanking was saved for very rare occasions.
The other thing is consistency. If you continually threaten a child with discipline but fail to follow-through, you've also lost the game. At three, a child is old enough to realize that there are consquences to his/her actions. If a parent threatens continually but does nothing--or is inconsistent--the child never learns that 1) the parent sets the boundaries and 2) that there are either no consequences to the action OR he/she doesn't know what punishment, if any, he or she will get so the child is going to continue to challenge your authority. Threats just become background noise.
Hmmmmm... My folks never did this to me and my brothers and we were the best-behaved lil' snots around, at least in public... We got whupped ALOT, and we got the hell whupped out of us, and the folks sure were p!ssed when they were doing it too. They got the point across pretty effectively and I'll probably do the same should I ever acquire some nippers of my own...
Just depends on how things are set up. My folks weren't the touchy-feely type-- everybody didn't sit down and talk a whole lot, and we kids hated it when we did 'cause it usually meant somebody was about to get hurt... More of a pragmatic, introverted upbringing I guess. But it suited us.