The D70 is indeed an old camera and has some limitations compared with
newer bodies: low res, lack of live view, no active D-lighting, few AF
points... However, if you do not feel frustrated about these limitations,
there is no urge to upgrade. A new lens will usually have a greater
impact on your pictures than a new body.
The 18-200 is certainly not the best lens if you look at pure image
quality. But if portability and zoom range are more important to you
than ultimate resolution, it can indeed be a very good choice.
As for the compatibility with future bodies, the question is: are you
likely to upgrade in a few years to a full frame body? Full frame
cameras (currently: D700 and D3 series) are quite heavier and more
expensive than DX cameras, and targeted at the prosumer and pro
markets. But Nikon still makes high end DX bodies (D300s and D7000). If
your answer is "yes, it's likely", then be aware that the 18-200 does
not play well with full frame. If the answer is "no", then do not worry:
the 18-200 is 100% compatible with any past and current DX camera, and
is likely to be 100% compatible with newer DX cameras in the foreseeable
To answer your last question, upgrading body and lens at the same time
can indeed be a wise move. Not for technical reasons, but simply because
you may be able to buy the lens at a discount price if you buy a body at
the same time.