2002 NEC: "406.3(D) Replacements. Replacement of receptacles shall comply with 406.3(D)(1), (2), and (3) as applicable. (1) Grounding-Type Receptacles. Where a grounding means exists in the receptacle enclosure or a grounding conductor is installed in accordance with 250.130(C), grounding-type receptacles shall be used and shall be connected to the grounding conductor in accordance with 406.3(C) or 250.130(C). (2) Ground-Fault Circuit Interrupters. Ground-fault circuit-interrupter protected receptacles shall be provided where replacements are made at receptacle outlets that are required to be so protected elsewhere in this Code. (3) Nongrounding-Type Receptacles. Where grounding means does not exist in the receptacle enclosure, the installation shall comply with (a), (b), or (c). (a) A nongrounding-type receptacle(s) shall be permitted to be replaced with another nongrounding-type receptacle(s). (b) A nongrounding-type receptacle(s) shall be permitted to be replaced with a ground-fault circuit interrupter type of receptacle(s). These receptacles shall be marked “No Equipment Ground.” An equipment grounding conductor shall not be connected from the ground-fault circuitinterrupter-type receptacle to any outlet supplied from the ground-fault circuit-interrupter receptacle. (c) A nongrounding-type receptacle(s) shall be permitted to be replaced with a grounding-type receptacle(s)where supplied through a ground-fault circuit interrupter. Grounding-type receptacles supplied through the ground fault circuit interrupter shall be marked “GFCI Protected” and “No Equipment Ground.” An equipment grounding conductor shall not be connected between the grounding type receptacles."
#49762 - 03/15/0508:05 PMRe: two wire outlets with no ground
Also, the armor of old style AC or BX (without the aluminum bonding strip) is not recognized as an equipment grounding means, and in reality on longer runs the armor's resistance is not low enough to trip the breaker if a dead short occurs. If your old house has this kind of AC, then I guess you need to feed the circuit with a GFCI breaker, or find the first receptacle and install a GFCI receptacle there, and wire the rest from "load". Don't forget the stick-on markers.
#49763 - 03/16/0507:45 AMRe: two wire outlets with no ground
Short answer: 1) if no ground exists put in a gfci at first recep and feed thru. Leave ground screw empty. You can use 2 or 3 prong receps for the rest of the ckt. Be sure to put stickers on downstream receps. or 2) install new 2 prong receps every place that's ungrounded and forget the gfci