What you will need:
# 1x 9 pin serial cable (half of it) - with a female connector
# 2x 470k potentiometers (I used 500k, and they work super - All Electronics Part)
# 1x Enclosure box (270-1802 from Radioshack works nice)
# 2x Knobs (274-0416 from Radioshack are pretty)
# Soldering iron (and solder)
# Wire cutters, strippers
Step 1: Map the Connector
Ok, so we have a C64 Pinout now we just figure out which wires connect to which hole on the end of the serial cable.
I just stuck a little piece of wire into the hole and used the continuity setting on my multimeter to find the wire that coincided with the pin.
(For example: brown to 5, blue to 9, yellow to ground etc)
*IMPORTANT note from tomtiki*
Unfortunately this did not work for me when connecting wires marked ground on diagram to pin 8 (ground) on the controller port, so I asked Mr. Google.
Wires marked ground in step 4 should actually connect to +5v, which is pin 7. See diagram here :
Here is an explanation of how the paddles work (see "game paddles" section):
If you have Atari 2600 paddles, they will work, but the pot in the Atari is 1M ohm rather than 500K in the Commodore, so after you turn the knob halfway, there is no change.
Step 2: Drill a Few Holes
Use a drill on the enclosure. You will need to make three holes, two for the pots and 1 for the cable!
Step 3: Install the Potentiometers and Cable
Put the pots in the enclosure, install the mounting hardware so they are secured. Feed the bare end of the serial cable though the third hole, tie a knot in the cable to prevent strain on the solder connections.
Step 4: Solder Wires, Close Box, Play Etc
Solder the corresponding wires to the potentiometers, follow the diagram.
... close up the enclosure, and you are ready to play!