How unseemly these days is it to use the word damn in educated or elderly circles? I have heard that there is a modified and supposedly less intense darn. Should I be careful to avoid the former and at best, use the latter? Or does it not matter anymore?
If you are learning English as a second language, I would say avoid both or any such oaths or swear words. Even if you swear normally in your native language, it comes across as very strange in the foreign language. The color it adds is not familiarity or fluency but jarring (in the same way a book-learned archaism sounds 'off' to a native speaker).
If you are a native speaker and want to know the acceptability, nowadays 'damn' is pretty low down on the taboo totempole. You wouldn't use it speaking with the queen or writing for a newspaper, possibly speaking with your work colleagues, and OK with your friends. 'Darn' is even lower, to the point where it might even sound a little forced (like 'gosh' or 'heck' obviously mincing your oath).
In general, I'd avoid using any words that you think have any possibility of giving offense to anyone who might hear, unless your intent is to shock or to demonstrate your disdain for social conventions.
As swear words go, "damn" is considered pretty mild these days. But why ask for trouble?
There are some people who think nothing of the most extreme vulgar language, and you could use a string of obscenities in a conversation with them without causing any notice. Others will be deeply offended by even the most mild oath. Many in the middle will find it annoying or distracting, even if it doesn't cause them to faint or to be deeply emotionally scarred for life.
Some people enjoy offending others, and go out of their way to use words that they know will upset people. Then they ridicule those who were upset on the grounds that "these are just words, why are getting all excited about it?" But if they are just words that don't matter, then why did you insist on using them when you knew they would offed others? What's the point?
If you're trying to, say, express extreme anger, shouting "Bob is a very foolish person!" may not convey it, and strong language may be appropriate. On the other hand, a more specific and literate criticism could be at least as effective.
Sometimes it's hard to say anything without offending someone, and at some point you may say forget it, this is getting ridiculous. I have this feeling about some of the "political correctness" language. But I think that's getting into a different category.
I recall an article by a film critic where he commented that he thought the increasing profanity in modern movies was counter-productive. After all, he said, many people are offended by it and would warn their friends away from a movie with a lot of profanity. On the other hand, he has never heard someone say, "That could have been a good movie, but they just didn't use the f-word enough."
These days, it is becoming more and more normal to hear people cursing, sometimes even the elderly. However, for the sake of being polite and respectful, it would be best to avoid cursing around them. Damn is usually considered to be a mild curse, and darn is even milder (most, including myself, do not even consider it a curse). I would stay on the safe side and use darn.
It depends on context: "Damn you!!!!" (in a loud and somewhat aggressive tone) the word damn is basically a replacement for the f-word, although by deliberatly not using the f-word it's not as bad.
Where as "Damn, I dropped my pen" (in an exclamatory tone) is not considered swearing, and almost casual.
Darn, can sometimes be seen as worse than damn, as it is a replacement for damn, so it could it some cases appear as though you are trying not to "swear" (using the term "swear" lightly as damn is not considered a swear word by the majority of people), and make you appear as though you think you have the moral high ground.
Overall it depends on your tone, and if you don't want to risk insulting, then don't use either.