This has very little to do with the C64 Orchestra (a classical orchestra playing C64 game music). The ZX Spectrum Orchestra consists of two human conductors and a bunch of ZX Spectrums – together making some of the finest minimalistic 8-bit audiovisual performances. Think of it as being somewhere between demoscene perfectionism and artistic exploration. Both members have been into electronic music for a long time (Mike in Mono, Plone, The Modified Toy Orchestra, etc).
They give the impression of simply finding Spectrums on flee markets and getting fascinated by the BEEP command in Basic. They are quite different to the normal way of getting into chipmusic, ie videogames, micromusic, media. It seems they really wanted to explore what was special with the ZX Spectrum, and I think they are doing a very good job!
Take a look at this video which shows a noisy and beautiful audiovisual performance from Sonar 2008. Judging from this interview, they mostly use their custom made software but also a ZX speech synthesizer and Wham! The Music Box. (a non-tracker spectrum software from 1985, apparently supported somehow by Wham) They don’t synchronize their machines, which is good to get some more dynamic live feeling to it all.
I feel a bit silly for not hearing about this before, so if you know of anything similar, please let me know!