Since someone reopened this thread, Article 324 in the 99 code allows K&T ONLY for extensions of existing, or by special permission.
It is not a grounded system, which is it's worst feature electrically speaking.
Trumpy, think open air, cause that's what this was, it would take lots and not harm anything. Anywhere it touched wood it was insulated with porcelain (if done properly). It was also often done with hard drawn copper, which made it even tougher, and danged hard to cut.
