Grounding a receptacle when there is no ground wire?
Use self-grounding outlets. A self-grounding outlet should be labeled as such when you buy them.  If not labeled, you can tell one if it has a thin copper wire or brass tab (see picture) running across one of the screw holes that attach it to the outlet box.  These outlets, so long as you have a grounded metal box, provide a safety ground by "bonding" the outlet to the box.  



Leave the bare copper wires twisted and screwed to the back of the box.  As far as connecting the black and white wires, I always use 'pigtails'.  Make two 6 inch lengths of wire (pigtails), one white and one black.  Attach one end of the pigtails to the outlet screws, and then attach the other end to the wires in the box using a wire nut.  The black wire is "hot" and attaches to the outlet's brass screw. The white wire is "neutral" and attaches to the outlet's silver colored screw. Connecting the wires in the box with a wire nut reduces the risk of continuity failures, and helps to preserve the length of the wire in the box if you have to remove the outlet in the future.