I'm not a Nikon user but interestingly I am in correspondence with another D70 user that is also having major acceptance problems and he is also shooting in full auto mode. I would be very interested to know what D70 users with good acceptance ratios are doing as I freely admit, based or reviews I have read, that the D70 should be capable of excellent results.
I use Canon equipment (D10 & D20) and nearly always shoot in Shutter Priority mode. This is largely because I grew up with shutter priority film cameras like the Canon AE1. For action shots what I do depends on the nature of the action to some extent. For approach and landing or take-off shots I generally work at around a 1/320 of a second. For jets I'll push that up to a 1/500 if lighting permits and for props / helicopters I will come down to 1/250 to increase prop / rotor blur. As far as possible I aim to keep aperture above f7.1 with f8 to f11 my ideal. I seldom select the ISO to anything other than 100.
As for AF
the standard advice for action shots is AI
Servo but I normally use AI
Focus which starts off in single shot mode but automatically switches to Servo if the camera detects motion. I also aim to get the lens to refocus just as I'm about to take the shot rather than trying to continuously track the subject for an extended period of several seconds. To do this I focus on the subject initially then take my finger off the shutter release button which will stop any AF
tracking then just before taking the shot I half depress the shutter button to do a final focus check hold it down and shoot. If I'm going to adjust the zoom setting I do that before the final focus check so I am not trying to AF
track and zoom at the same time. I find the AF
very fast indeed and seldom have a problem with a lens losing AF
lock or hunting to lock back on the target after AF
tracking has been interrupted. I always work with only the center AF
point selected as active. I admit that this is probably not a normal way of opeating but it DOES work for me in the situations described above i.e take off, approach and landing.
On the rare occasions I shoot fast jets at an air display I do put the AF
on Servo and try to continuously track the subject. I aim for a shutter speed above a 1/500 and prefer to be at 1/1000 while still looking for f7.1 to f11. In other words if it is not a bright day I don't try to get real high speed shots. I would also mention that I am normally using image satabalized lenses (300 f4 L or 100-400 L)
On internal image adjustments in the camera I generally do NOTHING at all. The only exception is that with my 10D I have found that with certain lenses I get slightly better results if I use one increment of in camera sharpening. My general advice would be don't do any colour / contrast / sharpness adjustments in the camera. Do these adjustments in Photo Shop on your computer.
Everyone has their own ways of doing things and the above is just my personal way of working.
All the best.
One thorn of experience is worth a whole wilderness of warning.