I always find watching an episode of Supernanny gives me the motivation to be consitent with the discipline etc. Find it helps give me focus.
I know that might come across as weird.
I think irrelevant punishments such as no dessert is a bit pointless. I think you're right to not make an issue out of food.
I would go for time-out of I were in your shoes. Give 1 warning, then if the behaviour is repeated, remove them from the situation. It's logical- if your behaviour is anti-social then you will be removed. Get an apology and always explain why they are going in time-out.
You need to figure out a reward system too- something must make them tick, surely? What about 3 pasta jars, brightly labelled with each child's name? Introduce an element of competition into behaving nicely.
Would a routine chart work? Set times for waking, bed, mealtimes, chore time, play time, one on one time with mum and dad etc.
You need to remember that discipline means to teach- it is a positive thing. Children will be happier if they have clear boundaries and consistency.
It is all so much easier said than done though, I think we all realise that. We are just human after all.