Yes, most of the time it is quoted out of context. It would seem when people read this verse, their eyes go straight to the word (beat) or any other word that has some sort of power, and their eyes gloss over all the options provided before one gets to the point of beating ones wife.
The verse you are talking about is the 34th verse of Surat Annisaa' (chapter 4). It first talks about men over or being in charge of women. This means men have their responsibilities and women have theirs, the responsibility of the men is to take care, maintain them and protect them. then further on into the verse it says, the emphasis is mine:
But those [wives] from whom you fear arrogance
So if you fear arrogance from them, then firstly you must advise them. If they don't listen and persist then don't go to bed with them,
forsake them in bed
but if they still don't listen and persist then finally you have the permission to strike them:
and many times those who do not know picture in their minds that when a Muslim beats his wife they picture a women with bruises all over her face and can hardly walk and... and so on. But this is not the case, and furthermore if we can solve the problem without hitting them then that is the best. Furthermore there are limitations to hitting. Like if we truly need to strike our wives, we hit them with a miswak, and we avoid the face (in Islam hitting any living thing on the face is forbidden). Furthermore it is best encouraged for us Muslims to follow the example of our Prophet, and he never hit his wives.
You may wish to see this answer on Islam.SE for further information and clarification. Furthermore I would like to mention that I am using the translation of the Quran called Sahih International, which is a reliable translation. but just like any other translation it is not always in line with the Arabic. Furthermore I would like to mention that verses from the Quran must not be followed by how one thinks it means, rather one should understand it by what it really means, people can take things out of context and make things mean things that really isn't the true meaning of the verse.