A quick bit of trivia for the tenderfoots in the audience: most graphics on the C64 were made using what was essentially ASCII art on steroids. The screen was divided into 8-pixel by 8-pixel blocks -- essentially the bounds of a single keyboard character -- within which you draw using 4 colors of your choice (each block could have a different set of 4 colors). In essence, you hacked the computer's stock character set (which was extensive!) to create tiles that you then composed into your image. And you though Photoshop was tough!
There were other graphics modes available, each with their own pros and cons, but from my experience playing lots of C64 games this was the most popular one.