| Stage | Bulb 1 | Bulb 2 | Bulb 3 | Bulb 4 | Bulb 5 | Bulb 6 | Bulb 7 |
|---|---|---|---|---|---|---|---|
| Initial | OFF | OFF | OFF | ON | OFF | OFF | OFF |
| Step 1 | OFF | OFF | ON | ON | ON | OFF | OFF |
| Step 2 | OFF | ON | ON | OFF | ON | ON | OFF |
Instead of drawing every bulb row, we can track just the set of positions that are ON at each stage and use the same two rules directly on that set.
Let $S_t$ be the set of ON bulb positions after stage $t$, numbering the bulbs $1$ to $7$.
Continue the same set update for the next steps:
Check $S_4$ for stability: with ON positions $\{1,3,5,7\}$, every ON bulb (3 and 5) has both its neighbors OFF (an even position on each side), so neither condition to turn off is met and they stay on; bulbs 1 and 7 stay on as end bulbs. Every OFF bulb (2, 4, 6) has both its neighbors ON (odd positions on each side), which is two ON neighbors, not exactly one, so none of them switch on. Therefore $S_5=S_6=S_7=S_8=S_4=\{1,3,5,7\}$.
So the number of bulbs ON at the end of Step 8 equals $|S_4|=4$.
\[ \boxed{4} \]