old house two wire question

[Howie89]

My house is over 50 years old and is a two wire system. I removed the two hole outlets and installed 3 hole outlets. The ground connection not being utilized. But from reading this forum and some DIY books I understand that this probably wasn't the best way to go and may even be against code. I want to upgrade so that I have a ground, 3 wire system. A friend of mine said to connect the ground connection and the neutral wires together since in a 3 wire house both wires go back to the breaker box anyways and are basically connected there. He said that the outlet will then show as passing when using a ground tester.

Looking at the breaker box it seems to make sense what he said, but I am posting this question because I have been researching this forum and nowhere do I see anyone mentioning doing this. This leads me to believe that either it is a bad idea or against code or both. So would someone please let me know if I can re-wire it this way and if not, WHY (I am just curious that way).

What are my other options? Running new 3 wire throughout the house? Installing GCFI's at every outlet? Or ....?

Many questions. Thanks for any and all help.

[kactuskid]

No, you definatly CANNOT connect the neutral and ground together on the load side of a circuit. "This is called a false ground or a bootleg ground. The neutral conductor can only be bonded to the ground conductor at the main neutral bus, where a large copper conductor carries all the return and faulted current back to the earth. If the neutral and ground are connected anywhere else in the building, all grounded metal becomes part of the neutral conductor, constantly energized and creating various voltage potentials." This is really really dangerous.

http://www.stevenspublishing.com/Stevens/OHSPub.nsf/frame?open&redirect=http://www.stevenspublishing.com/stevens/ohspub.nsf/d3d5b4f938b22b6e8625670c006dbc58/7fb9b72cd8dfb55986256dcd0054305a?OpenDocument

And, you're correct, you can't just replace 3 prong receptacles in place of 2 prong unless you have a ground available in the box. What type of 2 wire cable do you have? Is it armored cable? If it is you "may" have a ground but you'll need a voltage detector to know for sure. The following link will tell you how to test for one and the circumstances required in order to install a 3 prong receptacle. Otherwise you can install a GFCI in the first receptacles box on the circuit and connect the outgoing wires to the LOAD side of the GFCI. Then all receptacles downstream can be replaced with 3 prong receptacles but must have the sticker installed on them saying No Equipment Ground.

http://www.codecheck.com/250_50_commentary.html

[Howie89]

Thanks Kactuskid for helping me avoid a bad situation. Your reply was very informative.

I do not have armored cable, so it sounds like GFCI's are my best route.