I've heard that referred to as 'playful parenting' and it works really well with most kids.

Redirection is always a good thing, too.
Another one that I try to keep in mind is whether or not the kid is hungry, tired, overstimulated, etc. It helps me stay calm because I can think, "Oh, so-and-so hasn't eaten since whatever-o-clock." and it stops me from feeling like they're tantruming just to make my day difficult.

Usually it means that I can offer someone a snack or some quiet time or a hug, and it can help. The toughest one is tired because even when a child is tired, knows he's tired, knows he's grumpy because he's tired, sometimes he still will fight sleep.

Typically, doing a mental check for those things helps though.