What to do to the AB165 to make it sound better. 

Pre amp - Take out the 500pf and .001 caps across the 100k plate load resistors. That will open up the high end.
There's nothing else to do until you get to the phase inverter! 

Power amp - Change the coupling cap to the phase inverter to a .001. Make the feedback loop look like the AA864
by connecting it to the high side of the 100 ohm resistor. Change the .022 caps to .1. I actually use .047's here because
I think it tightens up the bass a little bit. Don't forget to reverse the speaker side of the output transformer by connecting
the green to positive and the black to ground. 

Bias suply - Make it look like any other blackface amp. I normally use a 50uf-50v filter cap, but anything higher than
that up to about 100uf is fine. Use 220k grid resistors instead of the 100k's. 

Power supply - Change all the electrolytics with original values. The extra 16uf in the power supply of the AB165 (but
labeled as an 8uf on the schematic) is a welcome addition and should stay. It would be a good idea to change the
carbon comp resistors under the cap pan with some metal oxide or metal film ones to reduce noise and popping (or the
chance of having it happen later on). 

Some notes: This mod takes a bit of creative thinking to get the layout to work. Fender had a nutty looking layout with
the AB165. Some of the eyelets that you think you want to use could be grounded from underneath by a hidden wire.
Look at the schematcs and layouts so you can figure out what you are going to do. I'd draw it out, but I don't remember
exactly how I do it. It only takes a minute or two of thinking to figure it out, but you do have to look at it a bit.  

The AB165 looks like nothing Fender ever did before, and indeed is a prelude to some of the idiocy that occurred in
the later silverface era (tonewise of course). 
Power amp - The power amp has some very strange things added for a Fender. For instance, there are 220k feedback
resistors from the plates of the power tubes back to the grids of the power tubes. The blocking caps between the plates
of the phase inverter and the grids of the power tubes are now .022 instead of the normal Fender .1. The feedback loop
now gets connected to the other side of the phase inverter via a .1 cap. This cap limits the frequency spectrum of the
feedback (this may be something you want to experiment with in a project amp, NOT a valuable blackface amp!). Why
doesn't the amp go into positive feedback runaway you tech heads ask? They reversed the leads on the secondary of
the output transformer to reverse the reference of the feedback. The coupling cap to the phase inverter is a .1, which is
far larger than anything that we saw before from a Fender amp. They probably did this in tandem with the
afforementioned .022 caps later in the circuit to limit the bass content. In earlier years, Fender did the opposite thing and
used a smaller coupling cap to the phase inverter (like a .001 or a 500pf in the case of the AA864) and used the larger
blocking caps later on. 
Pre amp - The preamp on the AB165 does look fairly similar to the AA864 but does differ in a few key ways. The
normal channel, which looks the same as before, is now connected to the circuit before the third gain stage. The third
gain stage now has a 470k interstage feedback resistor that makes this tube work like both a compressor and distortion
stage (even though that's not what Fender intended, but they didn't think we'd turn it up that loud anyway...). This is
actually a cool thing, and is a good way to get a nice singing amp tone. Fender did add some caps across the 100k plate
load resistors, which is not a good thing for tone. These caps send some of the high frequencies to ground, which
doesn't help tone any. One of these caps is a 500pf, the other is a .001. 
Power supply - Fender did add some filtering to the AB165 power supply, which is a good thing. It probably helps
tighten up the tone and reduce the possibility of motorboading (like some tweeds did). The schematic calls for an
8uf-450v cap at the end, but I've always seen a 16uf-450v cap there. 
Bias supply - Fender really screwed the pooch on this one. They set one tube up as standard non-adjustable fixed bias
and then you adjust the other one to match the fixed one with the pot. Seems like a good idea right? Wrong. These
amps almost always hum when they are adjusted so each tube draws the same amount of current. I don't know why,
maybe an engineer can explain it to me. So when you adjust the pot to make the hum go away, the tubes are not idling
the same and you get nasty distortion when you turn it up. 

For some (nearly) instant gratification, remove the 220K
resistors that form a local negative feedback loop around the
output tubes. Doing this will really "open up" the tone of an
AB165, regardless of whether or not you do any other mods. 

I started removing these feedback resistors when I noticed on
the scope that this "nested" feedback loop was actually
causing distortion and unacceptably low output. I never
understood why Fender engineers saw the need for this
nested loop, since it really hurts the tone of the amp. I never
really investigated why this loop makes the amp sound bad,
but I suspect that the feedback is lowering the input
impedance seen at the grids of the output tubes to the point
that the phase inverter is being severely loaded.