I have a small, .5 oz bottle of Betadine in my kit. From what I have read, it is safe and effective. IIRC the primary risk is if the patient is allergic to iodyne.
My understanding is that alcohol can dehydrate the cells (makes sense). I know that when I use 99% isopropyl to clean stuff, it is really hard on my hands. Doesn't seem like it would be that great for wounds.
On the other hand, it is a great cleaner and handy to have.
You could always go for both. :-)
-john