My son's school uses the same "card system" with the colors and levels for the number of times that rules are broken. This year his 3rd grade teacher has a five card system (versus the 4 cards in 2nd grade) so he figured out on the very first day that this year he gets one more "warning" or chance to break the rules before the biggest punishment (trip to the principal's office and loss of all recess for the next day) gets handed out. This system is used for breaking classroom rules like talking, running in the halls, not turning homework in, etc.
I have a hard time with schools taking away recess, too, Kriston. That's both as mommy and OT, who knows that the need to move is huge for kids 10 and under. It's just ridiculous to take away recess and force stillness in a child when that often then creates more unrest and the child acts out further.
I personally liked the system at the Catholic grade school my older kids attended back in the 80s/90s. There was detention, plain and simple, where you did some work for the teacher - not just sit and be still. The discipline was based on the infraction. I remember two of my sons friends who did some vandalism and broke a window at the school. They received detention for a week after school - with the janitor. They cleaned the school and helped fix the window. Made perfect sense. More sense than sitting still in the principal's office.
I also think that discipline needs to fit the child. My child really isn't bothered too much by bringing home his chart without a stamp for good behavior that day. He says stuff like "well, I was only on yellow, that's only one time that I was not behaving." He'd be much more responsive to praise for the times he *doesn't* misbehave and/or to taking away something more valuable in his eyes than recess (ie: 5 minutes of free choice time or computer time). Unfortunately, the classroom doesn't really lend itself to individualized discipline any more than individualized education! I only see individualized behavior plans for kids who have IEPs in place around us. And then most of the time the people creating the plan don't really get it right anyway (much like the education thing, unfortunately).