"During the same panel, Apple co-founders Steve Wozniak and Steve Jobs approached Commodore with an Apple II prototype, which was much more advanced in color, graphics, sound and games. Apple at the time didn't have the money to make and sell the Apple II, and was hoping Commodore would push the design to market. Commodore, however, preferred to develop the Commodore 64 as a simpler, lower-cost, black-and-white-only machine. "
AFAIK, the C-64 was never a black-and-white only machine and had a very good color spectrum (16 prinicple colors to apple's six -- 15 if you used "color mixing"). Yeah, there were limitations to which colors were assigned to which 8x8 pixel blocks on C-64, but game developers seemed to get by just fine. I have no clue where they got the idea that the Apple had better sound (or games for that matter).
"Let's show this prehistoric bitch how we do things downtown!" -- The Ghostbusters