i've been to the range once or twice now, and have shot 4"-6" groups with it using surplus ammo.  i don't know what i can expect with new ammo, but it would surely help.
i know there are other stocks available that readily accept scopes and all, but is it worth it?  i really like the M48 and would like to know what it's capable of.

For M48 accruacy, ditch the surplus ammo. 8mm ammo isn't known for it's outstanding quality (excessive runout, bad powder/projectile weight consistency - great for machinegun ammo, but lousy for accuracy). Kinda like trying to run a foot race in flip-flops, you need to have the right equipment. If you reload, you can use first rate components and tailor your loads for optimum accuracy in your rifle. Otherwise, try some premium hunting ammo. It helps to scope the M48 as the iron sights aren't that good. B-Square sells a decent no-gunsmith mount.

According to a couple of books I have around here, a new miltary barrel will usually produce 2"or so groups @100 yds handloading will get you to that point, surplus ammo isn't the best around, God knows what kind of components were used and who knows how they were stored over the last 50 or so years, and let's not forget that ALL of the 8mm surplus is corrosive, New store bought 8mm is usually loaded pretty wimpy,(ammo Mfg's afraid of lawsuits because of so many Mausers around,about 125 million, est, and not all are fit to shoot, but some people do it anyway) loaded properly, it is as good as a 30-06, and will do anything a '06 will, Serria just introduced a 200 gr. BTHP for 8mm, should be a fine bullet to shoot, my M-48 shoots well with 150 gr Hornady SP's IMR 4064-IMR 3031 are good powders for the 8mm, Roll your own for your M-48, and it may surprize you!

 I have 6 Mauser-actioned rifles, all with custom barrels, and all of them shoot under 1 MOA with handloads.  The current limitations are your sights and ammo.  Get a B-square mount, and some good commercial ammo, and you should get 2 MOA or less.  The M48s are very nicely made, and may do MOA with the scope.  Ask the Russians how many casualties they had from German sniper fire during WW 2.  The Mauser is the epitome of the bolt action design,

There’s surplus ammo out there that will give you 4-6” groups (or worse) in a match gun.  So there’s simply no telling what your rifle will do with decent ammo.  

The American commercial 8MM ammo is pretty anemic; the European commercial 8MM ammo is not.  Track down some Norma 8MM and give it a try (it is pricey, though).

I believe Williams makes a replacement rear sight that will fit where the current rear sight is located.