Is there any utility available to convert ubuntu-10.10-desktop-i386.iso to alternate cd image file?
I do not know what you mean by "convert". You may want to use zsync to download alternative cd using desctop cd as a base:
zsync -i maverick-desktop-i386.iso http://cdimage.ubuntu.com/daily/current/maverick-alternate-i386.iso.zsync
In that case zsync will download only those parts of alternate cd that are different from desktop one.