The wiring in your home is the highway of power that feeds everything electrical in the home. Over time, like everything else, it begins to break down and may need replacing at some point. But how is one to know?
Older knob-and-tube and Romex wiring has a way of becoming brittle. The insulation drys out and starts to crumble, causing the inner wire to become exposed. The cloth insulation around the wire deteriorates with age and eventually becomes unsafe.
When inspecting the wire, if the wire looks intact but just old, it's likely still safe to use. Check splices wrapped in friction tape and be sure that the tape is not unraveling. If the tape is not loose, these splices should be fine. If, however, the tape is loose, turn of the circuit, remove the existing tape and wrap with new tape. In most instances, if the wires are not disturbed, they shouldn't be damaged. It's when you climb around and pull on them that the brittleness of the wires rear their ugly heads.
Older knob-and-tube wiring presents a challenge to identify the hot and neutral wires. The neutral wire will have some sort of white tracer on the the wire, although you may have to clean the end of the wire with soapy water. Remember to only do this with the power off.
The biggest disadvantage of having old wire like knob-and-tube and Romex wiring is that these types of wires didn't implement ground wires. That means that if there is a short to an appliance, let's say, you will become the path to ground and become electrocuted.
If your home has these older versions of wiring, I'd recommend changing it to a grounded style of wiring and updating the amount of outlets in your home.