Read about Thomas Tempelmann's and Mike Pall's disk copy programs for the Commodore 64 and 1541 disk drive:

http://www.pagetable.com/?p=647

http://www.pagetable.com/?p=656

From the second article:

It worked by transferring the "live" GCR-encoded data from the 1541's disk head to the C64 and simultaneously doing a fast checksum. Part of the checksumming was done on the 1541, part was done on the C64. There simply weren't enough cycles left on either side! Most of the transfer happened asynchronously by adjusting for the slightly different CPU frequencies and with only a minimum number of handshakes. This meant meticulous cycle counting and use of some odd tricks.