*Long Post
In short each has its advantages so I will try to list the advantages of each lens and you can make up your mind - remember one thing though: no matter which you choose you wont lose!
FA77
The single best characteristic of this lens over the DA70 is that it has slightly nicer bokeh.
It is also faster by about one stop than the DA70.
Not a pancake lens but still quite a compact fast tele after all.
DA70
Pancake design - very cool.
Quick shift focusing - a great feature and very useful for macro/portrait work.
Sharper than the FA77 at equal apertures generally. Ie. the DA70 is sligtly sharper wide-open at f/2.4 than the FA77 at f/2.5
Less CA and purple fringing.
Faster focusing - the FA77 is one of the slowest AF lenses out there
This is mind the FA77 still produces some of the best images I have seen - though remember one thing that lens has been around for ages compared to the not even a year old DA70 so its natural there are more impressive shots from that lens. Some will tell you the FA77 has this *thing* about it - though looking at the FA77 the only *thing* that I see better is the bokeh - though I should add bokeh is quite an important thing in a portrait lens so the FA77 although technically not as good as the DA70 still produces some awesome images with great depth. The bokeh on the DA70 is still very very nice however - for a decent (though not perfect comparison) see this page:
Digital SLR and Lens Review: By popular demand: Pentax DA 70mm Limited compared to FA 77mm - the comparison is not perfect as the perspective and lighting are slightly different so it could favor the results of one lens over the other but in short - you judge.
And for sharpness check this out: center:
TeleCompareCentres.jpg photo - Steve Jacob photos at pbase.com
corner:
TeleCompareCorners.jpg photo - Steve Jacob photos at pbase.com
As you can see here the DA70 does look sharper at f/2.4 than the FA77 does at f/2.8 - even more so at the corners. But sharpness is only one aspect of the overall IQ of a lens - the FA77 for example seems to have more contrast like all the FA lenses over the digital DA's. If I had to choose though - I just dont see the IMO a little overblown magical thing about the FA77 over the DA70 (other than bokeh which is significant, and extremely smooth on the FA77 - gives good depth) but my choice would be the DA70 even still for QS focusing, faster AF, design, sharpness, the 7mm difference (I like 70 more than 77 for portraits) etc. The bokeh on the 70 is more than good enough - but if bokeh is indeed THE most important thing to you and you simply want the best bokeh you can get from a available new Pentax lens than the 77 is indeed awesome, remember that if you shoot wide-open with the FA77 you will get extremely shallow DOF (too shallow for many scenes but perfect for others) it will be very nice and smooth though the sharpness will be lacking a bit - so its a compromise but still then by all means get the FA77 if shallower DOF and bokeh is more important than the other factors. If the one stop difference and arguably not as good bokeh of the DA70 is not as important than the DA70 is the frontrunner IMO - I think with all this info you can make up your own mind but let me repeat - you cant go wrong with either!
Youre lucky you asked this just at the right time as I was doing a little research on the comparisons myself