Write the elements of $S$ in their ternary expansion (i.e. base 3 ). Then the second condition translates into, if $\overline{d_{1} d_{2} \cdots d_{k}} \in S$, then $\overline{d_{1} d_{2} \cdots d_{k} 0}$ and $\overline{d_{1} d_{2} \cdots d_{k} 1}$ are also in $S$. It follows that $S$ is the set of nonnegative integers whose tertiary representation contains only the digits 0 and 1. Since $2 \cdot 3^{6}<2008<3^{7}$, there are $2^{7}=128$ such elements less than 2008 . Therefore, there are 128 such non-negative elements.