I don't know that you will find a lot of research against time-outs in the classroom - BUT that is because any study worth its merit would only be studying time-outs used in a clearly defined behavioral mod system. Meaning: there would be clearly defined rules and expectations and a clear and consistent procedure for using a time out.
The way you have described this teacher's half-hazard approach sounds awful. I'm not sure how to approach this with the teacher. One thought is to ask if she can more clearly define the class rules for your child (and the rest of the class) so everyone knows when a rule is actually being broken. Many of these poor kids will go one of two ways in her current system: become self-conscious and angst in their every move OR give up trying to be "perfect" and potentially act worse then when they started her class. The book "123 Magic for Teachers" may serve to help you illustrate /define the many errors she is committing.
If she is inflexible and unapproachable, the principal /director surely needs to know.
