I only ever worked in one office, which did, indeed, have a watercooler. However, nobody ever hung out there. Being one of the techies, I was usually at my desk, or hanging out in IT, or getting pissed because one of the other computer guys would work nights and use other people's computers to look up porn (at least leave some on there where I can see it, dammit!). I have always assumed, from its portrayal in media, that people stood around it and talked about sports, television/movies, and gossiped about the slutty looking girl in telemarketing and whether or not she was banging her immediate supervisor (she wasn't, she was a very nice girl, with killer legs).
That's how I have always thought of the watercooler. I also think that the water in it tastes like ass, which is why I walked down to the soda machine and bought a Mountain Dew.