http://freenec.com/T235.html

(3) Non–Grounding-Type Receptacles. Where attachment to an equipment grounding conductor does not exist in the receptacle enclosure, the installation shall comply with (D)(3)(a), (D)(3)(b), or (D)(3)(c).

(a) A non–grounding-type receptacle(s) shall be permitted to be replaced with another non–grounding-type receptacle(s).

(b) A non–grounding-type receptacle(s) shall be permitted to be replaced with a ground-fault circuit interruptertype of receptacle(s). These receptacles shall be marked "No Equipment Ground." An equipment grounding conductor shall not be connected from the ground-fault circuitinterrupter-type receptacle to any outlet supplied from the ground-fault circuit-interrupter receptacle.

(c) A non–grounding-type receptacle(s) shall be permitted to be replaced with a grounding-type receptacle(s) where supplied through a ground-fault circuit interrupter. Grounding-type receptacles supplied through the groundfault circuit interrupter shall be marked "GFCI Protected" and "No Equipment Ground." An equipment grounding conductor shall not be connected between the groundingtype receptacles.

There is not really any limit on the number of down stream receptacles, but it will be limited because the circuit is usually limited by the electrician that wired the original circuit. Many jurisdictions don't allow extending an existing circuit without a ground wire with new wiring with grounds.

Fred is correct, if you're going to "extend" the circuit, you really need to provide one of the ways to connect a ground as Art.250.130 provides. You're given some leeway that you don't have if it was a newly installed branch circuit.