Joe, you are right in a way.
I made a search on the net and gathered the following information.
For SHORT TERM USE iodine is more frequently recommended than the chlorine. However one of the sources claims that it is somewhat less effective against Giardia. Neither is really good against Giardia or Cryptosporidium cysts. The disadvantage of the iodine is that it can interfere with the normal thyroid gland function, that's why it is recommended for short term use ONLY. On the other hand iodine is less affected by the presence of some impurities.
Below you can find the appropriate excerpts and at the end of each of them the URL. Check it out, interesting tutorials.
Chlorine and iodine are somewhat effective in protecting against exposure to Giardia, but may not be effective in controlling Cryptosporidium. Therefore, use iodine or chlorine only to disinfect well water (as opposed to surface water sources such as rivers, lakes, and springs), because well water is unlikely to contain these disease causing organisms. Chlorine is generally more effective than iodine in controlling Giardia, and both disinfectants work much better in warmer water.
http://www.epa.gov/safewater/faq/emerg.html
If you have a choice of disinfectants, use iodine. Iodine's disinfectant activity is less likely to be reduced by un favorable water conditions, such as dissolved organic material in water or by water with a high pH, than chlorine.
http://www.gorp.com/gorp/health/wtrflfaq6.htm
Protozoan cysts are often present in surface waters. Because cysts are more resistant than bacteria and viruses, iodine and chlorine should not be relied upon to inactivate them. When water must be continuously disinfected because of the unacceptable quality of the supply, the possibility of sporadic contamination or the presence of cysts, a water treatment device incorporating filtration and disinfection should be used rather than short-term disinfection methods.
Chlorine and iodine kill most disease-causing organisms and require short to moderate contact times. In fact, the use of chlorine on municipally treated water systems has virtually eliminated waterborne infectious diseases such as typhoid and cholera. Chlorine or iodine treatment alone, however, may not provide adequate protection against protozoa such as Giardia lamblia and Cryptosporidium parvum. If protozoa are present or suspected, it is recommended that the water be first passed through a filter with a 0.1-micrometre or smaller pore size to remove these parasites and then chemically treated with chlorine or iodine to kill bacteria and viruses.
Iodine disinfection of drinking water, however, should be reserved for emergency and occasional use (e.g., at a weekend cottage or in recreational vehicles). Iodine should not be used for long-term continuous disinfection because it is physiologically active, and ingestion in excessive amounts may be harmful.
http://www.hc-sc.gc.ca/ehp/ehd/catalogue/general/iyh/disinfection_devices.htm
Chemical purification involves the use of iodine or chlorine to kill the nasties in the water. This method is lightweight and relatively inexpensive, but will not neutralize chemical toxins. In addition, you must make sure that water at 25 deg. C (75deg. F) sits for 20-30 minutes with iodine in it for purification to take place. If the water is colder (as it usually is), you will need to let it sit longer - possibly overnight for cold stream water. Warm the water against your body or even on your stove if you want it to be purified faster. Once the appropriate time has elapsed, the "band-aid" taste of iodine can be neutralized with a small amount of ascorbic acid (vitamin C). Used properly, iodine will kill most protozoa and all bacteria and viruses in water. After prolonged use, some people develop thyroid problems, so be aware of this potential side effect.
http://www.fc.net/~tdeagan/water/one.html
Chemical disinfection can be achieved with either iodine or chlorine, with iodine providing greater disinfection in a wider set of circumstances. For disinfection with iodine, use either tincture of iodine or tetraglycine hydroperiodide tablets, such as Globaline®* and Potable-Aqua®*. These disinfectants can be found in sporting goods stores and pharmacies. Read and follow the manufacturers instructions. If the water is cloudy, then strain it through a clean cloth and double the number of disinfectant tablets added. If the water is very cold, either warm it or allow increased time for disinfectant to work.
http://www.cdc.gov/travel/foodwatr.htm
