Dealing with wire without ground
 

Aside from rewiring the house with wire with a ground, what are the hazards of rewiring the receptacles with new ones with a ground? This will allow me to use appliances with ground connections.

Use a GFI plug and mark the out side "no ground". The GFI will work and protect you from getting a shock.

So are you saying start every circuit with a GFCI?

That is the cheap way to get some safety without re-wiring.

The GFCI solution is the only one that is code compliant and safe. One GFCI at the beginning of the circuit or GFCI receptacles at each point are both valid options.

I understood that ground wires do not have to be insulated and
I could not find anything prohibiting running ground wires from the new receptacle under quarter round, baseboards, or wherever, down to where you can find the metal inlet cold water pipe.

Does anyone have a code cite that could be interpreted in such a way as to contradict this? "Speak now, or . . ."

Not a pro, but just my 2 cents' worth ... if your wiring is so old that it has no ground, I would think you probably would want to rewire anyway. Anyone disagree?

I will dissagree. 1. House not worth spending alot but OP wants to make somewhat safe on a budget.
2. OP wants to remodel the whole house while living in and wants to make it safe while he devalopes the plan.
3. People are still finding it tough to make a living and just can't afford everything at one time.
4. Should I go on.

I have read some additional articles and what I believe I understand is that a GFCI will protect you from electrocution but in the event of an electrical surge! It will not protect the electrical components?

Am I understanding this correctly?

If this is true, Is there any way to protect the equipment without rewiring? I do understand that there are surge protectors designed for ungrounded plugs but they are very expensive. Where would I find one to price out and what would I look up?

Whole house " might " get you there but then you likely need to change panel