The D70 and 350D are both good cameras and I ended up with the 350D +(batterygrip) because i had a 35 mm film canon eos with an extra lens and thought that was an advantage and I have to agree: the kit lens on the 350d is usable but underwhelming compared to nikons kit lens.Beyond that, you can get used lenses for either camera on e-bay for a song
Autofocus on the 350 is rather good and very quick with the usm lens . I have had no problems that werent related to user error.
If the camera appears to be struggling, manual focus is always there: it is an SLR! .If there are any deficiencies you will learn a workaround in day to day use.
Unsharp mask will correct any softness issues. Im surprised your friend with the 20D( £3-400) dearer doesnt realise just how similar the electronics in both cameras are.I tested the 20D and though better built ( has more "presence") did not justify (to me ) the extra expense
Whats a nice car? a merc , a bmw .. a bentley.. a Jaguar.. a Lexus.. .Go figure.Even Jeremy Clarkson has no straight answers there!!
Go in to Jessops, with a compact flash card and take pictures of identical scenes on either camera on the auto setting . If possible with equivalent 3rd party lenses . You can them compare the feel of the cameras and see firsthand the pics output. I suspect that identical pictures from either camera after skillfull editing would hide the identity of which camera took which. Jessops will price match too if you then decided to buy from them and felt thier costs were high. I tested the 300d , D70, 20D, 350D and even the Fujifilm 7000 ( ihad a 602 z) at Jessops without obligation before buying the 350D