Hi,
I afraid I'm not going to be of much help with your questions on flash since I never use it on either my K10D or A 700. The difference in image IQ up through ISO is so minimal I can't see it. Above that point the A 700 starts to get better by 1 to 1 and 1/2 stops.

I only shoot raw so sharpness is a result of the quality of the lens used. Between the 2 bodies I'm at about 15,000 clicks and not one of them is a jpeg. The 43mm LTD lens is my sharpest but the Tamron 28-75 f2.8 I use on the A700 most of the time is not far behind it. I also have a Tamron 17-35 which is much sharper than the Pentax kit lens. The old Minolta 100-300APO lens is an amazing piece of glass considering it's price.

The biggest difference is how fast the A 700 focuses in bad light. Shooting at EV 6 or 7 it locks focus immediately where as the K10D wouldn't even focus in the same situation. If your intention is to shoot moving objects in low natural light the A700 is what you want.

Hope this is of help to you.

Ken