First of all, those who know me know that I am not a fan of the AFCI requirements.
I also think we are confusing ourselves with our cleverness.
Principles long established, and usually now incorporated in building codes, say thay new rules apply only to new work, while simplly maintaining or repairing something only requires that you meet the rules in effect at the time the work was first done.
For example, if you were replacing a painted-over two-prong receptacle in an old bedroom, you would be allowed to use a new two-prong receptacle.
If you were replacing a damaged fuseholder or a faulty breaker that happened to serve a bedroom, you would be able to use a similar item.
But....if you are installing a NEW outlet in a bedroom, today's code requires it to be on an AFCI-protected circuit. This could very well leave the new receptacle as the only AFCI protected outlet, as there is no requirement that all the outlets in the bedrom be on the same circuit. (A more likely result, in an older house, is that this would result in AFCI protection to receptacles in many different parts of the house.)
Only the part (circuit) you are doing new work on (adding to) needs to meet current code.
Following the issue "upstream," if the existing service cannot take an AFCI breaker, you will have to make a change there. As I see it, this could be accomplished with a complete service change, installing a sub-panel to serve the circuit, or (in the 2005 NEC) installing an AFCI device, in a metal raceway, within six feet of the main panel, wired to protect the rest of the circuit.
(Unfortunately, I'm not sure anyone is selling AFCI devices).
Keep it simple...NEW work meets NEW code. And keep it honest- let's not try to fit "new receptacle" into the "fix an old one" exception.
"Congress shall not pass any ex poste facto laws".
