406.3D tells you what to do when replacing receptacles... in Oregon we have a state statute that says you don't have to replace anything if it complied when it was installed... so we still have a lot of 2-wire systems... does everyone here have the same kind of state rules or does something drive the upgrade requiremnet?

Cindy:
Here in NJ, we cannot "make" someone upgrade anything, unless it is a safety hazzard, or there is a renovation in progress.

I think most people change the receptacles so they can plug in a 3 prong item. Some "house inspectors" used to write up the old outlets, and request that they be changed.

Some towns have a property maintenance code (local ordinance), and they may require/request replacement of devices.
Hope this helps.
John

Some observations:
A safe way to "upgrade" to three-prong outlets is to use a GFCI receptacle to protect the circuit.
The bad news is, the GFCI's often have trouble fitting into the older, smaller k&t boxes. The easiest way around this is to use a "wiremold" extension to mount the receptacle out from the wall- but that's no always practical.

A lot of communities have similar statutes. In my town, a building damaged more than 50% (51%, actually) must be rebuilt to modern codes. Otherwise, if it was "to code" when it was built, it's still "to code" now.

Here in VA/DC/MD suburbs the general rule is if you work on it, it has to be brought up to code. If it's not code now and you leave it alone it's ok (it won't meet code but we don't have to change it)

I had to do this a while back on a receptacle box that was overcrowded because of some building handyman adding to the circuit. The man had wrapped additional conductors under each one of the terminal screws in the outlet, so that each terminal screw held two wires!

I pigtailed all the lines together and all the neutrals together so that I ended up with four wires (two lives, two neutrals, one wire per screw) and had to use a metal Wiremold box in order to extend the box so I could fit the receptacle.

It was either that or rip up the concrete wall and install a bigger box....not an option. Glad to see I'm not the only one who's done this. There's another receptacle I'm going to have to do this also.

While one method to address 2-wire receptacles is to replace with a GFCI, Creighton reminded us that 250.114 requires certain appliances to be grounded.
So, depending upon the situation, some additional thougth may be required.