DSLR or point-and-shoot?

What’s the deal with digital SLRs? I thought the main advantage of (35mm) SLRs over point-and-shoots was that–since you’re looking through the same lens the light goes through on the way to the film–you can see exactly what you’re going to get. But with a digital camera–since it’s got a LCD screen–you’re similarly able to see (almost) exactly what you’re going to get! (Also, the price of getting it wrong is much less, since you can take another picture right away.)

I’m trying to decide whether to get a Lumix FZ20 or a digital SLR like the Nikon D70, you see. The D70 is about twice as much. The lens and sensor of the D70 is gonna be much better than the FZ20, but is this because it’s an SLR, or because it costs twice as much? Does it also outperform an equivalently-priced range-finder?