What is the best way to deal with bad behaviour from a dog who has been abused?

I would say you're doing things right. One of my little dogs was abused when only a puppy and was left shut in a garden shed for the first few months of her life - the nervousness and timid behavious has never left her, even eight years on, and we're always aware of how things can stress her out so easily, so we try not to use raised voices around her (everyone has to have the odd argument though!) and we do our utmost not to startle her. She is so very well behaved though, so we've never really had to deal with correcting bad behaviour, other than she is very possessive when it comes to her toys, and smacking or any other dominance towards her has not had to be an issue. I think the firm voice and sending to the basket/cushion is the best way forward. Funny how they are out to please you - so they dont like the firm voice, seen as being told off and in bad books.