From the data sheet blurb:
"MicroVGA - Device Overview
MicroVGA is low-cost Microcontroller to VGA interface providing 80x25 16 color text mode (physical resolution is 800x600 at 60 Hz). MicroVGA is connected to a MCU via 2 or 4 wire RS-232 TTL or LVCMOS compatible interface. Display is controlled using ANSI terminal codes (such as cursor movement, colors, etc).
In addition to VGA output the interface provides also NTSC/PAL signal output for television viewing and PS/2 keyboard input. This makes the MicroVGA an ideal solution for user interface in embedded applications. The MicroVGA is a complete user interface module, 3-in-1 functions.
MicroVGA can be connected to any MCU with UART, such as Microchip PIC (including PICmicro, PIC16 and dsPIC33), Atmel ATmega, 8051, ARM, MIPS, or even PowerPC."
Datasheet: http://microvga.com/pdf/uvga-text-ds.pdf (http://microvga.com/pdf/uvga-text-ds.pdf)
(http://store.fungizmos.com/images/uvga_module.jpg)
In short, you could hook this up to a C64's (or C128's, but why?) user port and create a VGA/S-VHS 80x40 16-color ANSI terminal, with PS/2 keyboard interface to boot.
I wish there was a way to use this design's technology to creat a simple VGA/S-VHS adapter for the C128's CGA output.
$29.95 here: http://store.fungizmos.com/index.php?main_page=product_info&cPath=65&products_id=290 (http://store.fungizmos.com/index.php?main_page=product_info&cPath=65&products_id=290)
I actually purchased one of these for my homebrew computer project shortly after they become available. I haven't tried hooking it up to a serial port yet, but from the self-test mode works fine. Video quality is decent, but could be better; mainly, the squashing of the internal 800x600 video to S-video resolutions is not very pretty. Still, it's legible, recognizes standard escape sequences, and can handle ridiculously high baud rates, so it's not a bad little piece of hardware.
That's a very interesting device! Unfortunately, I don't see how you could use it to produce VGA or S-Video output with it. As I understand it, it is a stand-alone video controller; like the VIC-II or the VDC. You send it characters and it produces a video display of them. Maybe one of those chips on the board could do the job you want, but even with that high-res photo, I can't read the part numbers... (except 100-6L 5W which seems to be a diode)
I believe most/all of the grunt work is done with an FPGA; the guy's site has a lot of information on VGA video generation from back when he was developing it. Still, some of the information there could be helpful in developing a decent RGBI-VGA video converter.