I think the only time a fake tree (or no tree) is the more "green" option is when you live somewhere like the desert and the trees are trucked in. Since we live in the Christmas tree capitol of the US, I have no problem with farmed trees. They're right outside our door practically. The land is zoned agricultural use, so it's either trees or grass seed, and I'm allergic to the grasses.
Even better is getting a permit to cut a tree in the forest on public lands (which are essentially giant tree farms anyway). We make a day of it, go for a hike, have a picnic in the car, cut down a tree.... It's fun.
Most of the trees grown here end up being shipped to California, Arizona, New Mexico... Buying Christmas trees that have travelled from another state just seems wrong to me.