I have a C-8080 that is also discontinued, the focus does not track for action photos or at least photos where the action is coming at you. I'm pretty sure the 7070 is the same way. You could use it to get good stuff from the side but it is somewhat limiting. I shoot MTB action stuff professionally with a 20D usually. That said the 7070 and 8080 are great cameras with sharp lenses and excellent resolution. I bought mine on e-bay recently and got a great deal. I'd still recommend it to you but not for that purpose. If you want ot shoot moving subjects maybe look at the Rebel XT dslr, you can get it pretty darn cheap these days and it has a much better autofocus.

I don't beleive Olympus intends to replace the 7070 or 8080 with another fixed lens prosumer camera. The DSLRs have come down in price so much that you aren't going to see many $800-$1000 fixed lens cameras anymore. If you are stuck on Olympus check out the E-300 or E-500 DSLRs too, i don't have any experience with them, but their focus should be vastly improved over the 7070/8080.