Well, first thing, let's remember the "sunny-16" rule. Proper exposure for your beach scene is going to be very close to 1/ISO @f/16. In reality, the sand is going to provide a lot of fill from reflection, so you're going to want to bump up the shutter speed a bit.
The first problem you'll want to tackle is that with a 6 Megapixel DX sensor, diffraction becomes an issue at around f/8. If you've never heard of or considered the diffraction limit, there's a good article
here So, whenever possible, you'll want to shoot at f/8 or wider (lower f/number). So to sum it all up, assuming you shoot at f/8, you'll be starting with a shutter speed of 1/800 second.
And there lies the second problem. 1/800 second is faster than the 1/500 second that your flash will sync with
using Nikon CLS Now, that's an important thing to remember, because with the D70 and D70s, since every shutter speed faster than 1/250th second is handled electronically, the 1/500th second speed limit is artificially limited by Nikon CLS. If you
don't use Nikon's CLS (to take advantage of i-TTL), there is no speed limit! In that case, you're only limited by the flash duration.
This would be an excellent oportunity to limit the light coming through the lens by using a filter, such as a Neutral Density filter, or better yet, a Polarizer.
Now, as to using the flash with i-TTL in manual mode, the answer is yes, as long as you use it in standard i-TTL, and not the i-TTL Ballanced Fill Flash Mode. From the D70s manual, page 94:
"Standard i-TTL Flash for Digital SLR is activated automatically in
mode M and when spot metering is selected in modes P, S, and A."
and then, only with CPU lenses (AF-D, AF-S, etc. Not plain AF lenses).
I admit, I had to look this up, because it's not the normal way I shoot. With flash, I usually keep my D70s in P mode unless I'm really concerned about controling DOF, when I'll go to A mode, and in these modes, i-TTL BL works better outdoors to ballance fill and natural lighting. I trust Nikon engineers to have the mode they invented to work properly, and I haven't been disappointed yet.
I didn't look, but I would assume the D70 would be the same, due to the similarity of the cameras. You may want to check for yourself. If you have misplaced your manuals, or find reading electronic versions of the manual better, the following links may be helpful:
The Nikon Guide to Digital Photography with the D70 Digital Camera (File Size ~23M
SB-800 Instruction Manual (File Size ~3.2M
I hope I've helped, Russ. Have a good vacation!