It's one of the things that fascinate me as an author. One of my favorite books on the subject is English Through The Ages by William Brohaugh. It's great when you are writing a period piece or maybe a ghost story to go back and find what words would he use for something. Then there's slang and euphamisms - which I'm still looking for a good book on the subject.
In my latest book - during edits the editor wanted me to change a word. I pulled out my English through the Ages and looked up the work I used and the one she wanted me to use. The one I used was in the vocabulary as early as 1500 - the word my editor wanted me to use entered the vocabulary in the late 1800s. The character was from 1780. BUT without William Brohaugh's book I would probably have gone with the editors word - without knowing it was period incorrect.
Words are the backbone of a writer's tool kit. Dictionaries and Thesauruses are essential I recommend having at least 3 different ones of each and www.dictionary.com and www.thesaurus.com bookmarked. Besides, if you write hot scenes... it's fun looking up different terms for different things.
Another tip - make friends with writers around the country and the world. Slang is different in every part of the country and every nation. So, make sure you get it right - nothing will turn off a reader faster than the use of slang from a character that lives in their area.
So, if you know of a good slang/euphamism book, let me know.