To me, it’s the second step on a gradient of increasing punishments.
Example: the child is told not to do N, and does N anyway.
Step one: the child is given one warning as a reminder.
If the child ignores the warning and does N anyway…
Step two: you explain to the child why he/she is in trouble, the severity of the trouble, and that more punishment will follow if further violations occur. the child is put in time out. i.e. standing at the wall or in the corner, not allowed to move, talk, cry, look around, play, have fun, etc. for a certain amount of time.
If the child violates time out…
Step three: the child is spanked and further privileges are taken away (ex. tv, computer, radio, playing with friends, earlier bedtime, etc)
Steps can be skipped or substituted, depending on severity of the misbehavior. Example: if a 2 year old is playing with the stove or some other dangerous activity, I would spank immediately so the child will associate the pain of a spanking with the stove (or whatever), and avoid it. Pain is nature’s teacher, after all.
Time out is only useful after a child has reached an age where he/she is able to understand cause/effect and to understand reason (and the language you speak. duh), and it is absolutely useless if you don’t back it up with harsher punishment (i.e. spanking).
When I was a kid, it was never called time out either. My dad made my brother and me stand at the wall (there was a piece of black electrical tape where my nose had to touch, otherwise I’d get spanked) or do “air-chair” where you sit with your back against the wall and legs at a 90 degree angle, but with nothing underneath you. This is my favorite punishment, because even though it sucked and it hurt like crazy, it made my legs really strong.
So there are side benefits.