In my early readings of the old Basic D&D rules, I completely missed the distinction between game time and real time. I was convinced that you needed to have a stopwatch on hand in order to measure the passage of rounds, turns, hours etc. This led to some rather frantic combats ("Dad, hurry up and roll! The round is almost over!!") until I decided that there had to be something wrong with this dumb rule... and re-read the section correctly.
We also had our fair share of polearm misconceptions (lucern hammers, star-shaped glaives, bohemian ear spoons and the holy water sprinkler, which was clearly for use against undead, although we couldn't find any information on how long it took to fill one). The best came years later, however, during an exploration of Castle Ravenloft. At one point the party was climbing a huge spiral staircase when halberds mounted on the walls suddenly animated and began to strike at us. We fled up the stairs as fast as we could, only stopping when we were out of reach to heal wounds. One player still seemed pretty agitated, however. We asked him what the problem was and he replied: "Well, what about those birds? Won't they still be able to reach us up here?" Since then I have often wanted to properly stat out the Hal-Bird. Someday, maybe...
Mispronunciations were also fun. We also had a player who couldn't say "ogre" (it always came out sounding like "oggah") and he always pronounced "wyvern" as "wirrin" for some reason. And my sister spent quite some time referring to Tiamat as the Pneumatic Dragon - there is still an old sketch somewhere of a five-headed dragon zooming about the place on monster truck-style tyres...