I'm another one who thinks smacking is wrong. It works by making a child frightened and humiliated (esp. on the bottom and esp. in a girl from her daddy.) I don't see how a child can find that loving in any way, and all they learn is that hurting others is how to get what you want.
I think that you are right that you are undermined, not because you don't smack but because your dh does. In fact, this probably undermines both of you, because I guess you end up with a 'wait til your daddy gets home' type situation, which is unfair - by then your little ones have forgotten why they've been told off, and daddy becomes the big tough nasty one.
With my three year old, if I really need her to do something then she gets told once nicely, once sternly, then she gets a warning. Sometimes it can be that I will pick her up and carry her to where she is refusing to go, other times I warn her that she will lose a toy or a privilidge. If she doesn't do what I ask, then I follow through with whatever I have said I will do. It has to be immediate e.g. if she is misbehaving at the table, she doesn't get a yoghurt. I got this idea from seeing how they are disciplined at dd's preschool. DH and I have agreed to use the same approaches, so that whichever one of us is in charge she gets a consistent approach. We are careful not to name call - so we say that she has done something naughty, rather than is naughty, IYSWIM. If she is just acting up or whining, we ignore her, or say that we can't hear her unless she uses a nice voice. Distracting is another thing that works with her; she hates getting out of the bath so we turn it into a game by hiding under her towel. And of course we give her loads of praise and attention when she is behaving well.
I don't particularly want to be pwerful over my children. I want them to co-operate with me. Every now and then we have to be firm about how they co-operate, but generally dd1 does so of he rown accord.
I've found some books really useful: Raising Happy Children, the books by Steve Biddulph, and the Positive Discipline series of books, all from Amazon. Also got som eideas from Little Angels on the telly
Does your dd go to school or pre-school? How do they discipline?