In America these days, "underwear" is used as a euphemism for "underpants" -- it even takes a plural verb. In my dialect, "underwear" really is as general as it seems to be -- including underpants, undershirts, union suits, panties, etc.

As many have observed, a trouble with euphemisms is that, once well established, they themselves become indelicate, and euphemisms for them have to be found in turn. A spectacular example is documented by the OED: For nearly two centuries, "occupy", which around 1600 had become a slang word for fuck, was avoided in decent usage; at length, good sense prevailed, and today the word can be used without a blush.