hi simon,
i agree with what jm is saying... i own a D50 and if i had plenty of cash to spend on photog stuff i would certainly consider a D70s.... but as i am now, which is being able to spend a little every so often i would definately stick with my D50 and just get better glass. I think that would make a bigger difference to my shooting options and quality.
As for as the 18-70, i would get it if i had the spare money cuz it is suppose to be a good one, but again as i am now, i would go for a more specific lens, i would recomend the 50mm 1.8 or a good wideangle or maybe tele lens... depends what your shooting.