Those grid lines come in handy! When I forget to use them, I always seem to end up with wonky horizons. Guess I'm not very level-headed.
I'm quite happy with my D70 and use the "kit lens" a lot. It's a nice portrait lens if you're not shooting in low light. I too have had my eye on the 18-200mm VR lens, but it's not in the budget right now, and from what I hear, it's taking about 6 months to get one. I do have a 55-200mm DX ED and would like to trade it in on the 70-300mm VR that was announced recently--for the extra reach and for the VR. I'll probably get the 50 mm f/1.8 first though because of the cost.
As others have mentioned, high ISO noise is a factor. But my cousin and I both took a bunch of pictures of our kids on the beach at dusk a few weeks ago, and I honestly don't think the ones taken with their digital Rebel were
that much better in terms of noise. There was a difference, to be sure, but there was noise in the Canon pics too, and they both cleaned up pretty nicely with a little help from Noiseware. Also, the D70 has features like spot metering that I use a lot, which if memory serves aren't found in the Canon.
I also agree with you about the extra control buttons on the D70 vs. the D50. I was trying to help a friend with her D50 recently, and that extra command dial on the D70 and the added buttons make things much easier, IMO.
Hope you get what you want and that that money is well-hidden in the backyard!