There is no advantage in using the Magic Filter with normal strobes. If you want to use strobes you are better off using no filter. You can use the Magic Filter with strobes, but the image quality will be slightly degraded compared to no filter (because you will have to set a bluer white balance on the camera to counteract the effect of the filter). The more you move the colour temperature of the WB away from a "normal" setting the more you degrade the image quality, even in RAW.
The only advantage of using the filter with strobes is if you want to shoot mainly ambient light shots (say on a wreck dive) and then want to do a few strobe lit shots inside the wreck. Obviously you cannot take off the filter underwater and the flexibility of the filter allows you to turn on your strobes, re-white balance and shoot.
On the D70 you set the white balance by setting WB to Preset mode, then pressing and holding the WB button for a couple of secs, then taking a picture. If you have strobes attached and switched on, these will fire and therefore their light will be accounted for by the camera when determining its WB setting.
Alex