We use a mixture of techniques and it just depends on the situation. Usually with school we do natural consequences. For instance, if they don't get their work done because they are screwing around; the next day they have double assignments so we can catch up. If they are being really hard to manage we tell them that they can only have their DS, Skylanders, Minecraft, etc... if they finish all their school work. On really hard days I will spank them. Fortunately those days are few and far between.
We use a combination of gentle discipline, positive reinforcement and listening/explaining our reasons with ours. :-) I try to always use natural consequences when disciplining, so for instance if they can't stay with me or are too rowdy somewhere, they lose the freedom of walking on their own (this might be having to hold my hand the whole time, or riding in a basket for a littler one..) If they are fighting over a toy, that toy is put away, but usually only after a talk about the good options they can choose first (like compromising, taking turns, etc.). I usually try to make the 'punishment' fit the 'crime' if you will, but also always explain the reasoning behind the rules.
We don't do much in the way of punishments. Instead we do Behavior Bucks. The kids earn these fictional 'bucks' by having good behavior, completing chores, being helpful, etc...or there can be a deduction of bucks for bad behavior. Each child has a checkbook register to keep track. They can use these 'bucks' to RENT things they enjoy from 3pm till 10am the next day. All electronics (video games, DVD players, computers, etc) are kept in my bedroom closet. If they don't have the bucks, they can't play the games they love,
It really depends on the day and the child. I have one who is so focused on what is fair and right that she can't see the forest for the trees. I ended up having to take away a brand new toy she got for Christmas because she wasn't understanding the concept of "fair". She came to me 2 days later and explained to me in her words why she thought she lost her toy. She hit the nail on the head so to speak. She has understood why it was taken away and what she can do in the future to prevent it from happening again. I prefer natural consequences, but they only work with one of my girls...the youngest. With my oldest something only works once or twice and then not again. It is incredibly frustrating. Her dad has taken the talk to her approach which in my opinion doesn't garner results quick enough for me, but it eventually works.