If someone told this to me a year ago I would *never* have believed them. Its just incredible to see the possibilities Flash Player 9 is opening up! Darron Shall (of FlashVNC fame) and Claus Wahlers have set up an open source project building an emulator for the Commodore 64 in Flash. Over the last few days they've made incredible progress and they've now got the basic display code and a basic keyboard implementation in place, meaning you can actually run BASIC commands.
Check it out here (needs Flash Player 9 beta):
If you're having problems finding the correct keys, check out the C64 keyboard layout here: https://mirror1.cvsdude.com/trac/osflash/fc64/wiki/C64Keyboard
I'll definitely keep a close eye on this project, one of the coolest and most challening open source Flash project I've seen in quite some time! http://www.osflash.org/fc64