R.R.
I used the pack n play for early time-outs and never had a problem putting him in there for naps or just to play. He saw us doing whatever it was we'd been doing so knew he was missing out, the point I intended to make, and he learned, sometimes all we had to say was, "Do you want a time-out?" and he'd shake his head "no" and stop doing the negative behavior he was doing. Once he was able to scale the sides he earned a spot in the corner (every room has a corner) and does time-outs there.
Interestingly when I packed up his pack n play and it was in sight for awhile before I gave it away he would go up to it and say lovingly, "Awwww, my playpen!" : ) So I know he had no bad feelings towards it.