The 1541-III is a PIC microcontroller controlling an FAT16 MMC/SD card with .D64 files. It is connected to the Commodore via the standard IEC bus. The circuit as a whole behaves like a 1541 disk drive (therefore the name 1541-III).
http://jderogee.tripod.com/project1541.htm-----
This is a project to replace the CBM 1541 floppy drive on the C64 with an MMC card. I dont want a HUGE 1541 connected to my DTV, so im making an MMC reader that will emulate the 1541.
http://www.pyrofersprojects.com/mmiec.php