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Previously Rejected Commodore 64 Emulator Approved and Available on App Store [Updated]
Apple has since been in contact with the company and a slightly modified version of the application has been approved for sale on the App Store. In particular, Apple appears to have requested the removal of the Commodore BASIC interpreter from the application which allows running arbitrary code.
The application bundles 5 games (Dragons Den, Le Mans, Jupiter Lander, Arctic Shipwreck, and Jack Attack) and the company plans on offering additional (properly licensed) games for sale and download. The cost of the additional games will be dependent on the conditions of the license holder but most are expected to be in the $0.99-$1.99 range (or even Free). The emulator only allows you to run these officially offered disk images and will not run arbitrary disks.
This video shot by TouchArcade shows the emulator in action, but shows titles that are not yet available, such as Bruce Lee and International Karate.
Manomio has said that they are actively working on bringing additional titles to the emulator.
Update: C64 has been pulled from the App Store Apple after it was discovered that the BASIC interpreter could be re-enabled through the software. A revised version of the application addressing this issue has been submitted to Apple for approval.