i believe there are no bad children, just bad parents. to suggest that a child is "bad" is to suggest that small children are capable of malice; a trait we dont learn until much later in life. all behavior is learned, and poor behavior is likely betraying the ineptitude of their teachers/parents. but it is possible to convince them otherwise; youd be amazed at the progress that can be made by speaking/explaining to children, as oppossed to "BECAUSE I SAID SO!"

not all of the problem parents ive run into are are bad people, they just make the mistake of either assuming that children are capable of undesirable adult traits, or assuming that children are stupid. actually, our most difficult students are the ones with strict parents... most of the "bad" kids mimicking their parents bad behavior can be convinced to change their ways, but the kids with strict parents are usually so confused and nervous that its hard to get them to listen at all.

source: ive spent the last 10 years (often successfully) teaching 3-5 year olds to be nice, and then watching them watch their parents behave otherwise. im a kindergarten teacher.

edit: one more thing: regardless of your discipline technique, PLEASE make sure that your children understand WHY what they did was not ok. if they dont know WHY, then youre just a big person being inexplicably mean to them.