Banding isn't that hard to remove...
But the K10D can't even handle minor PP at 1600, it show this
problem even before the image has any adjustments.
As a general statement, I disagree here--I can post-process the heck out of ISO1600 shots and get great results. I was able to do it with my Fuji F30--the K10d is a piece of cake comparatively speaking. Perhaps it's true for grossly underexposed shots--but that's true for any camera.
Here's an ISO1600 I just did yesterday--it would print sharp at 8x12 easily--probably larger. I boosted both contrast and saturation (the latter significantly). It also had two passes of sharpening and had some NR to make it smooth. But the noise is reasonable enough that you can make it pretty smooth w/o hurting detail. Then downsize to 6Mpixels which also reduces noise and increases subjective sharpness. (link to the 6mpixel version above the image.)
I don't have a lot of experience with these patterns because I don't often shoot images that would show them, but it looks to me (and as you say) they tend to be visible mainly in parts of the image low in detail--this makes them especially easy to remove.
Even your shot is pretty easy to fix depending on what sort of end result you're after. Hope you don't mind I took the liberty to give it a try:
This was sort of quick-n-dirty. Boosted +2EV (ISO6400), then applied noise ninja followed by my own adaptation of the degrunge method (tutorial written by "byRo" at retouchpro.com). I used default noise ninja settings--that's why there's still some noise grain in there. But the degrunge technique pretty much kills the banding part of the noise.