I think some kids (especially boys) are just not ready before they're ready. Our son wanted nothing to do with a little kids potty or regular toilet - there was no getting him to go near one without clear distress. Fortunately for us he loves to be naked, so was naked at home much of the time, and went in our private backyard to do his business. Unconventional perhaps, but it worked for us. He never had an accident in the house during the day, so he obviously had awareness and control. By letting him have autonomy over his body, he got over his concern about the toilet on his own. One out of town trip we took, he went pee in the toilet when I did, and used one from that day on (he was just under 4 by the time this happened). The thing I've noticed is that the boys who were potty-trained (meaning it was "taught" to them, rather than letting them discover this on their own), seem to have more accidents and are still wearing pull-ups at night past the age of 5. Our boy has been sleeping diaper-free since the age of 3 - has only had a few nighttime accidents. I think it's very important to let children have ownership of their bodies. I also think rewards are silly (for everything, but that's a whole 'nother topic!). The rewards to using the toilet are built-in to the act itself. Stickers and cheap toys can not be a bigger reward than feeling in control of oneself and not having to wear a diaper! And I think it's building a twisted value system when sold that way.
In the end, I think by parents making a big deal about this, it becomes a bigger, seemingly impossible task (to the child). As our son got older, I also found myself getting frustrated and felt I must *DO* something about it. It wasn't until I learned to let the process unfold on its own, that he found his way. I was blocking his learning by being so stressed about it. It taught me a great lesson, and parallels how learning works best in all areas of life.