You're mostly right, pedant. However, as the immigrant population in the USchanges, there are more and more people here who were educated to use British english and one sees it occasionally.
Sounds to me like the 'st' in whilst represents the tail-end of a substantive verb, hence the absence of 'I was' in the example. Can anybody confirm or correct this?
Is there anything like whilst should be used in between the sentence and while should always be at the beginning?or vice versa? like for example: While i was planning to go... or I saw hime whilst waiting in the bus stand.
No there is no rule.The two words have the same meaning, 'whilst' is the older version (some dictionaries list it as obsolete) and it usually appears only in formal or poetic writing.
If you stick to 'while' you won't ever be wrong, whereas 'whilst' can easily look out of place.