I wasn't aware of the demoscene during my C64 days, so don't know any good classic demos. But demos are still being made for it, and though I haven't been keeping up with demoscene releases lately I was very impressed by Unicorn from Chorus which was released in 2008. There are some really impressive effects in there but the video doesn't fully do them justice. Just try and imagine that everything you see runs at a silky-smooth 50 fps, even the 3D-objects near the end. Also I really like the music in this one, especially the first and third songs.