This is great book on these very issues - how to discilipline and deal with sibiling rivalry without breaking the children's spirits. I think it's a great book for someone like the person described in the original post - someone who clearly wants to solve sibiling disputes with both children feeling loved and respected:
http://www.amazon.com/dp/0380799006...=&hvptwo=&hvqmt=e&ref=pd_sl_5u4wvukiua_eYou could suggest that book or give it as a gift. I got it as a gift from a friend when my second child was born and I was very grateful for it. It's a really good book with lots of practical advice.
Siblings Without Rivalry is a wonderful book and I use its teachings every day. I think it is aimed a slightly older kids, but it works even with young ones as long as you provide enough support.
I think that it would encourage you to get the kids to work this out without you having to be in the middle setting rules. That would mean prompting them to talk to each other about who the ball belongs to, who is using it, whether it will still be available after the older child is done playing with it, if there is a "favor" they could trade for it, etc. If everyone stays calm but they can't find a solution, then the ball gets a time out and no one plays with it. If anyone freaks out and starts hitting, they
and the ball get a time out.
