Following a few links from the
C-One Commodore 64-of-the-future project, I discovered that it is by no means the only such project, and merely the tip of the iceberg. There is an entire subculture of people (mostly in northern and central Europe, it seems) hacking Commodore 64s to do things they were never meant to, and developing all sorts of odd artefacts; such as
The SuperCPU, which appears to be a 20MHz replacement CPU for the C64 with extra PC-style RAM; people are writing demos, games (and modifications to cracked commercial games) and even
operating systems for it. And you can top it all off with
an IDE interface which plugs into your C64's cartridge slot.