What type of sound are your trying to localize? If it a sharp sound like a gun shot or a rumble like an electric motor or something else? How far apart are the microphones? Do they have good response at the frequency you are listening to?
I had an experience with a project at work where we found localization of sharp sounds to be nearly impossible. We were using difference in time of arrival. Echos and the like played havoc with the system.
Not sure how well phase would work, but the source signal would have to be a good tone for this to work well I think. If the sound had noise in it, the phase difference would be all over the place.