[nihzm]

You're right, in southern Germany, Switzerland and Austria (?) it is still widely used in everyday life. It's interesting how northern dialects "choose" zwei while the southern ones preferred zwo. Also, IIRC in some regions the (few) elderly still use all three with their original grammatical rules.

[lxgr]

It's definitely not common in Austria, and I also haven't heard it in Germany (outside of a "clarity of communications" context on the phone). Bavarian (which is close to many Austrian German variants) would use "zwoa", which sounds quite different too.

[fnordian_slip]

In Franconia, we use "zwo", "zwä" and "zwei", but it might just be very local to the small towns in my area.

[xen0]

As a non-native speaker, I've used it a couple of times at a bakery to make sure I don't get too much of what I'm asking for.

Doesn't help when I _do_ want three of something though...