What is appropriate punishment for heinous crimes by Buddhist standards?
Though Buddhism does not make a stance on punishments, they should be there as a deterrent. But there should be also a opportunity to reform one self through the practice of Vipassana. Meditation will lead to reform, as it is latent tendencies of aversion, craving and ignorance which lead to crime, and meditation helps alleviate them.

I do not think capital punishment should be acceptable this does not give an opportunity to correct oneself is depriving of life.

Also see: Vipassana Meditation Courses For Correction Facilities, Doing Time Doing Vipassana