I have rewired an entire house so I’ll jump in here. My house was 1920 construction with knob & tube wiring throughout. All my sockets were two-wire and there was no grounding. Being a geek, I wanted to make sure my numerous electronic devices were protected. The original plan was to rewire sockets in the computer room & the living room (for the stereo stuff). I ended up rewiring the entire house.
By all means, find out your local code requirements. In my town, however, there was no obligation to meet code on a retrofit - just on initial construction. I did, however, have to get a permit & have it inspected by the city inspector at various phases in the process. The city required that I have a licensed electrician handle the power-meter to circuit box replacement while I was permitted to take circuits from the box to the rest of the house.
Grounding to a water pipe is frequently forbidden these days. The water company employees got tired of being zapped by poorly wired houses. There’s also a lot of plastic pipe being fed into houses today so it can be a poor ground. Code for me required a single six-foot spike to be driven into the ground, this was wired to the circuit box and all ground circuits were tapped in there. (There’s a special wiring block in the circuit box for just this purpose). Grounding to electrical conduit is not necessarily a good thing - it may not be well grounded itself or may not be continuous all the way to the circuit box.
I ran 12 guage Romex (three-wire) throughout and sized the circuit breakers to match (important). If you have basement & attic access to all the rooms then it’s not too hard. If you have a two-floor house, then it’s much more trouble. If you have fire-plates in the walls, then there’s some sweating involved (get a long drill bit - like a cable installer’s bit).
Fixtures on the outer wall may be difficult if your walls are insulated (mine weren’t) and one trick that worked for me is remove the baseboards, run wire in a channel under them, and replace the baseboards. Mostly, though, the majority of new wiring ran along & through the ceiling and floor joists.
Make all wire junctions in junction boxes with appropriately sized wire nuts. Tape the wire nut to prevent it turning back off accidentally. Brace any ceiling fixture if it may have to support a ceiling fan one day - better now than later.
If you want GFCI protection throughout the house, it’s possible to buy a GFCI circuit breaker and protect the entire circuit. They’re expensive but probably not as expensive as a house where every socket is GFCI.
Rewiring was a major pain in the ass. I did, however, save a ton of money over hiring somebody.
Sunset publications, available at most big-box home stores, has a book on house wiring.
Tools:
[ul]
[li]Get youself a socket-tester for a couple of bucks (three prong plug with indicator lights) and a neon-bulb tester. [/li]
[li]Long extension cords are necessary to keep your power tools (and refridgerator) running as you work your way around the house. You can do most houses in sections. [/li]
[li]If you drill the floor/ceiling joists then get a big bit (splurge for the expensive one - the cheap blade-bits wear out fast), if the hole you’re pulling wire through is too small then dragging the wire through a series of them takes a lot of pull. [/li]
[li]Get a pair of electrician’s pliers - they’re gold. [/li]
[li]Consider cut-in boxes for new outlets - they’re designed to keep your walls intact. [/li]
[li]A light thin chain will “flow” through small holes to aid in “fishing” wires. Use chain and rope to pull the steel fish tape, use the fish tape to pull wires.[/li]
[li]Tape the romex to the fish tape as well as bending the romex over the end-hook. It seems wasteful to tape and untape the wire but the first time you catch the romex on some internal wall element and snap the hook off, you’ll realize the value of taping the joint.[/li]
[li]Overalls can turn you into a walking toolbox.[/li]
[li]Get the heavy-duty abusable light bulbs for your work lamp. Rewiring usually means working in the dark and having to grope your way around because you busted yet another bulb is not fun.[/li][/ul]
There’s tons more but I’ve already exceed the scope of the OP.