I've handled the D-70 and it is a pretty nice camera. But my preference between the two would be the XT. I'm a little biased, having a ton of Canon equipment, but I think that the XT offers a better package for the money. Feature - for - feature, the Canon is relatively equal to the D70, except that the XT is smaller, lighter, and offers a little more resolution with a little less image noise (grain). Plus, it's a bit less expensive than the Nikon.
The one thing I liked about the Nikon was that the standard "kit" lens was a bit nicer than the Canon "kit" lens. Not necessarily optically better, but of a more mid-range build quality, closer in design to Canon's 24-85 or 28-105 f/3.5-4.5 USM lenses. But both offer a multitude of lenses that can be fitted to the camera, and I prefer Canon's overall lens selection.