I agree with Heidi - no rush to get rid of bottles... DD is 2 now and still has 2 a day... as long as they drink the bottle and get on with the day, no need to worry at all. DD sits down, drinks her bottle in a few minutes and that's it. If they are packing it around all day, that's an issue.
I would try formula in her sippy and see how she does... but do remember that she does need 20 ozs of milk (and other dairy) a day still.. you don't want to cut bottles and have her stop taking milk.