Interesting... so, it was an emulator that required special hardware. I wonder if it allows the use of a z-80 card. If so the C-64 would be able to run CP/M making it a very versatile system.
The C128 is a significantly expanded successor to the C64, with nearly full compatibility. The newer machine has 128 KB of RAM in two 64 KB banks, and an 80-column color video output. It has a redesigned case and keyboard. Also included is a Zilog Z80 CPU which allows the C128 to run CP/M, as an alternative to the usual Commodore BASIC environment. The presence of the Z80 and the huge CP/M software library it brings, coupled with the C64's software library, gave the C128 one of the broadest ranges of available software among its competitors.
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The C128 runs CP/M noticeably slower than most dedicated CP/M systems, as the Z80 processor runs at an effective speed of only 2 MHz
As someone else posted, the C-128 and 1571 disk drive had much better CP/M support. The 128 had a built-in Z-80 and 80-column capability. The 1571 could read/write CP/M format (and MS-DOS format for that matter) disks.