My two year old is into throwing some fits every now and then as well. I'll say, "Do you want time out", and she says "yes" and walks over to sit on the stairs. After a minute or two I'll say are your ready to say your sorry now and she'll either say yes or no. If she says no she will then let me know when she is ready to get out of time out. She's not cried once in time out yet, but for some reason it ends the original fit and she's once again happy. Her new thing now is to drop her shoulders and hang her head and say "I'm sad" when I tell her no. I can't help but laugh at her each time she does this, and then she smiles and giggles back.
Good luck. They don't call them the terrible two's for nothing.