This is right in the line of sight and will cause this occasionaly.
If possible get an SB600 or SB800 and then you can bounce your flash this will prevent the preflash right in the eyes. Also the SB800 comes with a diffuser this helps soften the light. The SB600 does not have a diffuser from nikon but there are after markets.
One last thing can the really bright light be the auto focus assist lamp. I used to turn mine off on my N80 and if you get one of the speedlights they use infrared AF assist no bright light.
Side note the D70s will have the same problem and set up they are very close. Plus you are right all the reviews state the D50 has lower noise and better out of the camera pictures and a slighty faster AF due to new algorythems and sensor spread. But the D70 gives more control, two wheels and slighty better build. Give some take some. Both are great camera's period.
If you have time post your question in the Speedlight forum many D70 owners can help to.