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Hi Mrhero,

To find an appartment in Zurich - I suggest looking at the website homegate.ch - this is the best way to find a decent place, unfortunately it's in german or french. Beware of agents, most of them use homegate as their tool and then try to charge you a commission.

To answer some of your questions:
The number of rooms do not include kitchen and bathroom. For example a 2 room appartment = to a one bedroom flat, a 3 room would be a two bedroom flat, etc... It always consists of one living room space + additional rooms. Sometimes it gets complicated when 1/2 rooms are involved, this can be anything from a wide entrance to a Victorian style bay and gable... 

Water and electricity are usually included in the rent as so-called "Nebenkosten" (translated as running costs)- They are pre-estimated charges. An actual calculation is done either annually or bi-annually and compared to the estimate - at the end of the year or period you may either have to pay more or receive some money back. Landlords  are usually honest about it as they can be audited.

Basic cable TV or Internet access is not a given, make sure you ask about it.

As for other costs, you will need to pay about 2.00 CHF for every garbage bag you produce. Official bags are usually purchased at the local store. 20pcs per package. Furthermore there is a broadcasting tax which every household has to pay 3 or 4 times a year for the right to view TV and listen to radio, unfortunately something you have to pay regardless of whether you listen or watch.

Hope this information helps.
Some good websites include xpatxchange.ch Check out various expat groups on facebook.com as well.