J.,
I have the same problem - my 3 y.o. started this about 3 months ago (see my post from about 2 or 3 weeks ago). It got so frustrating because we are renting a furnished place, and the stuff he throws is not ours! He has broken plenty of decorative items that I thought were safe around him. Plus, as you said, he throws things AT people, and I believe he knows this will hurt.
I cannot shut him in his room for a time out - there is no room that is totally free of things to throw or destroy, except for the bathroom. I tried shutting him in there a couple times, but it just didn't feel good to me, and he would get so hysterical. After reading the responses to my post a few weeks ago, and talking to a couple of people who work with children, here is what I have ended up doing:
The only option that remained (as far as I could see)was to sit him in my lap on my bed, and cross my legs over his, and bear hug his arms. I do this quite lightly, exerting pressure only to resist when he pulls away. And if he seems to just want to scream and not kick or hit, then I will just hold him. He has learned to push my buttons by screaming "Oweeee, Mommy, you're hurting me!" but I have since learned to pay close attention to how much pressure I am using, whether his back is pressed into my belt buckle, etc., so I am confident that I am NOT hurting him. Plus today I learned that even if I totally opened up and said "OK, you can get down, but if you hit or kick or throw, you have to sit with Mama again" he actually would NOT climb out - he would stay with me, kick me a little, and I would resume the "mad hug." I really got the sense that he felt the best if he could stay in the mad hug until he calmed down. I have been timing our mad hugs, and they last about 30 - 45 minutes. It sucks to use my time this way, but it is the best solution I have come up with. I know the throwing is either an attention getter (he knows how upset we get, or 2)a sign that he is so angry he cannot control himself -- or maybe both! In any case, I have not found that any amount of reason or consequences works when he gets to the point where he is throwing things at me. The best reaction seems to be consistent, non-reaction - very calm with no talking except to say "when you can stop hitting/kicking/throwing you can get down." We just seem to have to weather the storm, but I feel better doing it together like this, even if it takes alot of time.
Let us know what you end up doing - I would love to hear more about other parents' approaches! Good luck!