I like to fondly refer to the toilet as the bog. I don't think it's rude or offensive. I just think the 'bog' seems more appropriate than the fancier terms available (lavatory, WC etc.). It's a bit cheeky and a bit irreverent, and when you are talking about bodily functions you just have to be.
There is something deeply sensitive and vulnerable about the humble loo. In western society, you don't let anyone else see you at it (except your spouse, maybe - but even then I'm sure there are couples who wouldn't allow such a thing), and yet we all do it. From Her Majesty Queen Liz (Gawd bless 'er) to the lowliest tramp, we have a common need to let nature take its course and expel some smelly stuff. And yet, it's a deeply private affair between you and the porcelain throne. Perhaps the vulnerability thing is something to do with our primal instincts. If you are in the middle of your business, it's a lot harder to defend yourself against a hungry tiger or a tribal foe who suddenly discovers you with - ahem - your pants down.
Why am I writing about bogs? Well, I recently found out about 'EcoSan', a human waste systems that is, quite frankly, brilliant. Consisting of a simple raised toilet block, human urine and faeces are collected in a chamber underneath that over time is broken down into high-quality fertilizer for plants. It's a little bit different to what we in the western world are used to when it comes to doing a number 1 or number 2, but I could see the system easily adopted over here. You don't need complicated plumbing and you get high quality nutrients for your garden which are better than anything you can buy in homebase.
Maybe we in the western world should adopt something like the EcoSan ... as populations increase, the burden on our sewerage system is increasing and sanitary health will become more and more of an issue.