Eeeaggh. Yes, this took a while. I started after lunch and finished sometime after midnight (look at the clock in the bottom right hand corner of the screen). I'm still kicking myself at some of the dead ends I went through.
The result (even after I cleaned it up after the stream) is still a bit slow. The biggest issue is that it redraws the entire line every time you press a key in insert mode; fixing this is moderately straightforward, as I have all the information to know where the first modified character is, but it'll require some refactoring.
The biggest think I want next is a yank buffer, but the only realistic option is to store it on disk, which would be painfully slow. Being able to do repeated inserts would be nice, too.
I actually know Bram Moolenaar; maybe I should ask how he did it...