How OK is it to replace ungrounded outlet with GFCI outlets?

Q2. Under what condition can a two-wire receptacle be replaced with a three-wire receptacle, when no ground is available in the box?

A. Where no equipment bonding means exists in the outlet box, nongrounding-type receptacles can be replaced with [406.3(D)(3)]:

• Another nongrounding-type receptacle.
• A GFCI grounding-type receptacle marked "No Equipment Ground."
• A grounding-type receptacle, if GFCI protected and marked "GFCI Protected" and "No Equipment Ground."

Note: GFCI protection functions properly on a 2-wire circuit without an equipment grounding (bonding) conductor, because the equipment grounding (bonding) conductor serves no role in the operation of the GFCI-protection device.

CAUTION: The permission to replace nongrounding-type receptacles with GFCI-protected grounding-type receptacles doesn't apply to new receptacle outlets that extend from an existing ungrounded outlet box. Once you add a receptacle outlet (branch-circuit extension), the receptacle must be of the grounding (bonding) type and it must have its grounding terminal grounded (bonded) to an effective ground-fault current path in accordance with 250.130(C).