Euphemism: From the Greek for “good speech,” euphemisms are a more agreeable or less offensive substitute for generally unpleasant words or concepts. The euphemism may be used to adhere to standards of social or political correctness, or to add humor or iron understanding.

Examples:
1. A restroom for toilet room (the word toilet was itself originally a euphemism). This is an Americanism.
http://www.answers.com/euphemism&r=67

2. Pre-owned vehicles for used cars.
http://www.answers.com/euphemism&r=67

3. The big C for cancer (in addition, some people whisper the word when they say it in public, and doctors have euphemisms to use in front of patients, e.g. "c.a.").
http://www.answers.com/euphemism&r=67