I admit that sometimes if a kid is being completely incorrigible, a little smack might need to be what it takes to get them to learn not to behave that way. That being said I really can't see myself hitting my kids, because I just don't think it's right.
My dad used to threaten to "knock my lights out" when I was a kid, oftentimes when I didn't even realise I'd done anything wrong, and that always bothered me: he'd never take the time to calmly explain what it was I'd done wrong, he'd just threaten me. My mom was a bit better about things. That being said, when my dad threatened me with the same sort of thing 2 years ago, I looked him dead in the eye and said "Dad, you've been using that threat on me for years and I'm getting sick of it. If you're gonna hit me then quit mouthing off and hit me." He left the room, only to return an hour later with a comment of "I'd never hit you."
Also, if anyone's seen Shoot 'Em Up, there's a pretty good scene in it that relates to this discussion.