The major worry from cremation is actually heavy metals form things like people's fillings being released into the atmosphere. The problems with burial is we are fastely running out of space to put people and the creation of graveyards and the way people are buried is not an 100% ecologically friendly solution either.

Have a read of this for a good summary of the ecological issues for both.
Cremation or Burial  Carbon Emissions and the Environment - lower your carbon footprint

Personally I don't know which method is the most environmentally friendly, I have never found any evidence to sway me definatively to one side. I do believe that some people are beginning to investigate and create more environmentally friendly burials.

I don't know how big a percentage of pollution cremation contributes but it is probably very small compaired to industry, cars, deforestation, cows and rice farming.

Here is some interesting reading you might like
Crematorium concern over carbon footprint becomes a burning issue | Environment | The Guardian