A few things to mention about the audio input pin:

• If you want to work with this ext input pin, don't connect a signal directly! Instead, couple it with a 1-10 uF capacitor.

• This pin is left floating in most (perhaps all?) C64 board revisions. It contributes to a huge amount of background noise and simply grounding it will give you a much better signal-to-noise ratio on your SID.

• A switching jack can be used to automatically ground the pin when you unplug your input cable.

What you can do with audio-in signals in the SID:
The EXT-In Signal is mixed with the internal sound voices and through the main volume register and through the filters.

So, when you just want to use the SID with the external audio signal you can adjust the volume and filter it.
Is has a setting for high-pass, low-pass, band-pass filter and combinations of it. has a register for the resonance frequency and a register to set the q-factor of the resonance.

but that all theoretical things are maybe a little bit useless when it comes to the old generation of SID-chips. theire filters behave very weired with lots of distortion. people used it in their way with the games that it sounded good with the "originally not intended" distortion of that filters.
also different SID-chips from the same production behaved different cause of the production process that delivered not constant results for the analog parts on the chip.

so these filters are not something that made the c64 great for modifying external audio signals.
however, when you have the later models of the SID: 8580/6582 or 6581R4AR the filters work good and predictable - like the designer wanted them to behave at the first place (but did not have the time to correct it that way cause the c64 needed to be finished and sold!).

but is the SID-chip a worthy chip just for filters with a digital interface? i don't know the chips that are available for filtering, but i guess there are good chips available for that kind of task. i don't know about the ealy 80's - anyone?

that is pretty sweet.

Then there is this  ;-)

yaaahh the famous vicious sid demo. do you know if the source code of the routine is available anywhere?

bw don't forget to check the best part of that demo: http://www.youtube.com/watch?v=ZW2XKSWUPLw

if you're a kickass coder you can use the filters with samples anyway

Also: you could fry the chip plugging shit in so I never bothered with it.

Of course, but I've never really seen a need to have an audio in on the C64.

Couldn't you attach it to a switching 1/4" jack that grounds the pin when nothing is plugged in?

I usually ground it, as it is floating as standard on a C64. Grounding it reduces noise, although it prevents the audio input from being used.

apparently i am behind the times. Is I mean.... have any of u guys used the sid filter as an efx processor? How does it sound?

Is there any sid based synth that doesn't use it?

It runs the external input through the SID filters.

prohphet64 mssiah uses it. So does hardsid

AFAIK it is just used for filtering.  So I might be wrong but whenever there is an instance of filtering in anything on the C64 if you pump audio through that it will be filtered.  Lots of people do it wither their MSSIAH setups and stuff.