Personally, if you can't get to Ithaca (which is obviously superior to either of the other options since you can show some Cornell love) I'd do the phone interview.
An alum interview can go very strangely from some of the stories I've heard and can go either really well or really poorly depending on who you get. It will either be really softball and nice or could become confrontational and weird. (This is based on some of the
interview debriefs I've read over at
accepted.com)
With the phone interview I think you're getting more of a known quantity by talking with the adcom member. I'm also much less nervous over the phone and would have loved to do a phone interview if I didn't live so close to Ithaca.... but that's just personal taste.
If you are really good at talking in person I'd go with that option if you're sure that you'll blow your interviewer away with how awesome your are. Just be prepared for anything that the alum will throw at you... either way I'm sure you'll do fine.