Is it okay to send a LOCI as an e-mail to whoever the admissions contact is that has ben e-mailing me to begin with? Or is it better to send a formal letter via snail mail?

From what I've heard its better to send it via snail mail, more respectful and shows that you're more serious about what you're saying. Also, if you're including an addition LOR or some other documentation you can just put it in the envelope. Other people have said that for the sake of making sure it gets there, someone actually has to open a physical letter where an email can be accidentally deleted. (I went and printed mine on nice paper at Kinkos, but I'm pretty sure that's entirely unnecessary )

I don't know if the danger is being accidentally deleted, but with the volume of e-mail they get it can get lost in the shuffle. If you send a snail mail letter, someone has to actually open it up, read it to see what it is, and then presumably physically place it in your file. You can also certify/deliver confirm it so you know it was delivered. Like the other poster said, it shows you put a little bit more thought into it than just typing an email up on your lunch break, and it's just all around classier.