The machine featured 128 KB of RAM, in two 64 KB banks and an 80-column RGBI video output (driven by the 8563 VDC chip with 16 KB dedicated video RAM), as well as a substantially redesigned case and keyboard. Instead of the single 6510 microprocessor of the C64, the C128 incorporated a two-CPU design. The primary CPU, the 8502, was a slightly improved version of the 6510 capable of being clocked at 2 MHz. The second CPU was a Zilog Z80 which was used to run CP/M software, as well as to initiate operating mode selection at boot time. The two processors could not run concurrently, thus the C128 was not a multiprocessing system. The C128's complex architecture includes four differently accessed kinds of RAM (128 kB main RAM, 64 kB VDC Video RAM, 2 kNibbles VIC-II Color RAM, 2 kB floppy drive RAM, 128 or 512 kB REU RAM), two CPUs (main 8502, Z80 for CP/M; the 128D also incorporated a 6502 in the disk drive) and two different video chips (VIC-IIe and VDC) for its various operational modes.
Source: Wikipedia, "Commodore 128," available under the CC-BY-SA License.