We bought an old house for the kids to live in for a while. When we were ready to sell we had to have a lot of work done to get it up to code.
What Eric said is what we ran into. The cloth covered wiring on porcelain knobs all had to be replaced. Your house probably has balloon framing that makes it difficult to replace wiring in the first floor ceiling. We ended up tearing out the old lath and plaster. Lots of nasty stuff hidden behind old repairs.
You'll want to hire an independent house inspector. They can usually tell you what is what. Get references because all inspectors are not equal.