First, let me establish that when comparing armor and dodge, there is a point (depending on how much armor you have) where they are equal, and in either direction, one of the two stats will be better. Therefore, trying to use math to PROVE one or the other as better is simply impossible; it's a balancing point. You can say "In my opinion, the dodge is better" since Nidalee generally has at least 150 armor at all times but neither is factually better since the amount of armor you have varies throughout the game (unless you can make a case where it's always better, regardless of the value, which I will prove below is not the case).
Second, the amount of mitigation dodge provides is (dodge chance) * (damage not mitigated). You need to multiply by damage not mitigated, because otherwise you're ignoring the fact that armor would have mitigated part of the dodged amount anyway. TL;DR Adding 10% dodge does not mean you take 10% less physical damage than before. Unless you have 0 armor.
Also, since armor provides effective health (you have a pool of health to absorb blows), it ends up being a linear relationship between armor added and number of absorbable blows (multiply your health times your armor reduction; divide by raw damage taken; adding X armor means you will survive X% additional raw damage). Dodge is also a linear relationship (10% dodge means I live through 10% more blows). Thus, armor and dodge effectively scale at the same rate in terms of how many blows it will save you (once you account for the fact that Dodge "overkills").
We can solve to see where 10% dodge is equal in mitigation to 20 armor, and decide if we like that. In the following equations, armor is how much armor you already have existing.
With 10% dodge: average_physical_damage_taken = damage_input * ( 1 - (armor / (armor + 100) ) ) * (1 - 0.1)
With +20 armor: average_physical_damage_taken = damage_input * ( 1 - ( (armor + 20) / (armor + 120) ) )
Simplify a few pieces:
1-(a/(a+100)) = 100 / (100 + a)
1-((a+20)/(a+20+100))) = 100 / (120 + a)
If you put those two equations equal to each other you can see how much starting armor you need, for 10% dodge to be equal to 20 armor.
0.9*(100/(100+a))=(100/(120+a))
90*a + 10800 = 10000 + 100*a
10*a = 800
a = 80
Thus 20 armor is more valuable than 10% dodge at armor values less than 80. Once you have more than 80 armor, 10% dodge is more valuable. Of course this does not take into account Nimbleness nor the MR it gives. 20 MR is almost always more valuable than 20 Armor, but not by much. So if you were to say 150 armor were an acceptable breakeven point for dodge vs armor, I'd say that 20 armor/MR is ahead of 10% dodge by a fair margin. In general % damage reduction and dodge are great on champions you want to stack defenses on (like tanks) and flat armor and magic resist are great on champions you want to stack offense on (like DPS).
Having said all this, I think we're definitely open to giving Nidalee a little more armor and magic resist in cougar form. We've also experimented with giving her Spell Vamp and I rather liked that solution except the problem was it worked with Javelins and Bushwhack traps.