Layouts featuring Lionel, American Flyer, and other O or S gauge trains don’t have to be expensive. Joe Rampola has lots of ideas for creating a good-looking layout with lots of animation (aside from the trains) using mostly inexpensive items. His site has lots of pictures and video clips.
His work has been featured in both Classic Toy Trains and O Gauge Railroading magazines.Among his better ideas: Lay a loop of HO gauge track, then put 0-4-0 mechanisms from cheap HO scale locomotives in the frames of 1:43 scale die-cast cars and make streets for the layout. This is a similar approach to K-Line’s new Superstreets, but Rampola did it years earlier, and his approach is a lot less expensive for those who can live without instant gratification. His approach also allows you to use any vehicle you want, so long as you’re willing to modify it.
He also has plans and instructions posted for lots of inexpensive animations he did using the cheap unpainted (and unfortunately, discontinued) K-Line figures from the classic Marx molds of the 1950s. Sometimes you can still get lucky and find a box of unpainted K-Line figures hiding on hobby shop shelves.
He even has his animations controlled by an old Timex Sinclair 1000 computer. He gives enough detail that I suspect someone good with homebrew circuits could adapt his circuit and his program to another computer, such as an Apple or Commodore. Even a 3.5K unexpanded VIC-20 ought to be up to the task, let alone a behemoth Commodore 64.
I’ve always bristled at the thought of adding electronics to my traditional layout, because my trains are my escape from computers. But using a real computer–real men only need 8 bits–to control parts of a layout does have some appeal to me.