Sean,
I'm currently using a S70 in a WP-DC40 housing and more recently along with an Inon D-2000 strobe setup. I'm still very green to u/w photography so my pics are probably not doing this camera justice...
I just got back from a liveaboard trip from Bali to Komodo and have some of the photos up (good mix of topside and u/w) over on scubaboard.com.
the album link is as follows:
http://www.scubaboard.com/gallery/showgallery.php/cat/1102
Lots of pics but mostly ameuterish. Unfortunately we missed the Manta cleaning station and the two eagle rays we did see were too far to get a good shot...
Again I must warn u I'm still much the neophite especially with wide angle shots and getting used to the external strobe... (one of these days I'll get a nice wideangle pic of a seafan/coral with a perfect blue backdrop and sunbust...) I'm still in the Aperture priority mode...
I've had the camera and housing for little over 3 mos and have used it for 3 dive trips around Asia (about 30-40 dives). So far I haven't had any issues with the housing (knock on wood). The buttons are easy to use even with gloves (well actually only tried with thin tropical gloves). I've only been down to 35m max with it (its rated 40m). One niggle I have about the housing is that it does tend to scratch the nice black finish of the S70 (it might be that my silicon gel pack might be a weebit big). The diffuser that came with the housing does a nice job and the internal strobe is actually pretty strong for a camera that small (within 3ft u/w or so). As you already know, u have to slide the front to turn the camera on and toss in the housing. If you want to power it down, you just hold down the function button. The camera does get warmer than other cameras I used. but I haven't had any condensation problems (I slip a silicon gel pack in). Battery life is so so but I understand improved from the older battery from the s60. If u avoid spending too much time reviewing pics on the lcd, you could probably get close 100 pics with the majority of them with the flash. The S70 lens actually does a nice wideangle shot in itself.
Only complaint I have with it is the autofocus tends to struggle a bit in low light situations but then I think that applies to a lot of digicams... But since I've bought a strobe which has a focus light, I don't notice this as much. Does macros nicely but if you try to use the zoom even a little bit w/ macro on, the AF lock gets touchy until u move a good distance away (defeating the purpose of the zoom!). But then again it helps with ext. strobe placement.
The reason I went with the S70/DC40 combo was the compact size but with all the manual controls and RAW function!. In addition to u/w photography, I wanted something compact that I can take snowboarding and general outdoors (sorry the Olympus 5060/7070's are too big to slip in a jacket pocket). Actually even with the Inon strobe setup, its still very compact compared to what Oly 5050/5060 rigs I saw on my trips. Topside, its got great optics and takes beautiful pics. Plus I love the 7megapixels which allows me plenty of room to crop a lot of my poorly framed shots!!!
I used it on my 1st two trips without weights and didn't find the positive buoyancy annoying. If anything, I'd rather have it positive in case the strap broke. Rather look on the surface for it then race down over a sea wall for it... Plus I think Canon charges some ridiculous price for the weights (I guess u could do a little DIY weight at the local Home Depot...)
Best of all, Inon has recently come out with lots of goodies for the S70/S60 and W-DC40 including a mount kit for there D-2000 strobe and bayonet mount for their wide angle and macro lenses. You can check it out at www.inonamerica.com.
sorry to be so long winded but hope u find it somewhat helpful.
cheers,
Mike