We're considering buying a 1935 English Tudor style house in Los Angeles. The current owner says she updated the electrical. In the basement, I can still see cloth wiring connected to a working light. I know she updated the electrical panel to 220, and the old knob & tube panel is cleaned out.

What are the possible scenarios we could see with an "updated" electrical system, and what is the likelihood that we would have to lay out some major cash to bring the house up to today's standards?

Also, is it reasonably safe to have cloth wiring and new electrical subsiding together on the same system?