I only got hit once, and it was when I nearly walked into traffic when I was 3. My mom gave me a quick swat on the butt. Other than that, I was never hit, always grounded.
All it takes is some extra effort from the parents to enforce the grounding. For example, I only ever tried weaseling out of it once. I was typically grounded for a half-hour to an hour when I was younger (ages 4-9), depending on what I did or how old I was. One time, I decided to make use of my Game Boy, but I got caught because I lacked any common sense and my parents actually took the time to enforce their punishment by stealthily looking into my room and checking on me. My parents took my Game Boy, used the circuit breaker to cut the power to my room, and then tripled my waiting time. Three hours of staring at my ceiling at age 6 was pretty torturous for me, and I never tried cheating my punishment again.
Other than being sent to my room, for minor infractions (i.e. forgetting to take my dirty shoes off after coming inside) meant extra chores. I'd have to vacuum the rug I'd just messed up and then do something else I didn't like, such as emptying the dishwasher or dusting a room.
As I got older, I was pretty well-behaved. The only thing I got punished for was when my grades would slip (B- or lower). When that happened, I had my video game time cut way down (the only reason it wasn't eliminated completely was because we moved a lot and most of my social life was online)and I had to read a book for at least an hour a day, which I absolutely hated. Doing that every day for five weeks, which was the time between progress reports and our actual report cards, was enough to get my grades up.
I'm told when I was an infant/toddler, I was put in time out. It was two minutes for each year of my age (two minutes when I was 1, four minutes when I was 2, etc.). If I ever tried getting out of my high chair or crib, I'd get put back in and the timer would be restarted. It doesn't sound like a decent punishment, but it apparently worked wonders because I hated staying still.
I guess my point is that grounding worked fine for me because my parents took the time to enforce it. They also kept track of things I especially hated doing so they knew what to make me do if I stepped out of line. I've always appreciated not being spanked or belted or otherwise hit.