Well... this is a slightly embarrassing incident that happened to me a few years ago when i was a fresher in the company...
Coming from the college days, stepping into the corporate was like a kid getting into a new school for me.
After the training period which was no different from a mini college project, I was put in a web development project in a different location. New to the place, all that was on my mind was how to get out of this place when the clock stuck 6. I didn't know what was located at which part of the building including water, rest rooms, conference rooms etc.
One day, my team lead Soumya said, 'I will be back in a while, after visiting the rest room'. I took it literally, I asked her 'is there a resting room here'. 'yes right there' she pointed to the rest room which I thought was a toilet or a loo!!
She understood my innocence, came closer and whispered in my ears 'rest room is a polished way of calling a toilet'. I had seen 'resting room' in railway station and other public places and thought 'resting' room and 'rest' rooms are same. Phew!!!
After a couple of years, I moved to US. Though 'rest room' term is accepted there, 'wash room' is more commonly used... This time, I am no innocent (mind you :) )
In Europe, people call it 'Water Closet'
and yes, I am talking in English and on the same thing 'toilet' (well.. Indians call it that way).
To know more about rest rooms term usage visit http://en.wikipedia.org/wiki/Restroom
For some interesting discussion http://forum.wordreference.com/showthread.php?t=238270