Hey 06aculot,
I am in a very similar situation as you are. I have applied to 20 schools (i know) for Mechanical Engineering, and so far 2 acceptances.
1. UCSD: PhD program with a fellowship, guaranteed funding for 3 years.
2. UIUC: MS program, no immediate funding.
According to US News rankings, UCSD is like top 12 in engineering, and UIUC is like top 5.
Like you, I want to get a PhD, 100% sure.
I am still waiting from UC Berkeley and Cornell, but assuming that I am rejected by both, I am likely to choose UIUC. Here are my reasons:
1. I can afford tuition with my own funding + parents' help, so financial aid is not a big decision making factor for me.
2. Although many people around me keep telling me that I shouldn't look at the rankings but choose the professor that I like, I disagree. I believe that those rankings are credible because they are decided by many key factors that are believed to be most important for schools. After all, it's not like they are picked by random, but they are decided after careful review of many different aspects that are regarded important for good quality schools. I also believe that there bound to be plenty of good professors that you would be happy to work with in such schools with good reputation. Otherwise why would they have good reputations?
3. I believe that getting a degree from a high reputation school is very important when you look for a job in the future. You send your resume, and they look at what schools you went to. If you went to a school with a high reputation, obviously your first impression is excellent. And I believe that the first impression like that is very important for getting a job. Of course your actual ability to do certain jobs depends on how hard you studied and how hard you worked. But, I believe that if you are attending a prestigious school it can be a big boost for you to study extra hard (you could argue that it can go other way because of arrogance or something.....but it's just my opinion).
4. In my case, I don't mind applying for PhD programs again in the future. I really wanted to get into MIT or Stanford, but my week areas were low GRE scores and low GPA for first 2 years in college. I had little time (1 and a half month) to prepare for GRE, and I know for sure that I can score much higher if I take more time to study. Also, my GPA for last 2 years were pretty high (over 3.7) because I learned how to manage my time well and studied hard. I believe that I can keep doing that (and even better) when I go to grad school. For these reasons, I wouldn't mind going to a grad school for MS program first, study extra hard, retake GRE, and reapply to my dream schools in 2 years from now.
You don't get to get a PhD twice. You have only one shot. Yes, it might take extra 1-2 years if you do MS only first and then reapply for PhD. But I think that it is important to get your PhD from the school that you really want. For me, I wouldn't mind sacrificing 1-2 years and extra effort to give another shot for my better future.
If you want to keep doing your PhD in Cornell (UIUC in my case) after you finish Masters, I don't think it's that hard. I talked to people who have PhD, and told me that I shouldn't worry about MD or PhD when choosing a school. I was told that it is not hard to change your degree goal once you get into the school. During your Masters study, as long as you get good grades and find a professor that is willing to advise you for PhD, you can continue to PhD program. For this reason, they told me that the immediate degree goal doesn't really matter. And I believe that is true.
I hope this helps you decide. Whatever you end up doing, I wish you the best.