I would err on the side of caution and get damp location rated fixtures.

Safety concerns aside damp location fixtures with significant metallic ornaments / parts should not tarnish as quickly.

Are you planning on taking a shower in the "downstairs powder room"?

There is no reason to waste money on anything beyond regular old fixtures.

The downstairs powder room only has a toilet and vanity/sink -- no shower or bathtub. I wouldn't even ask but for the odd fact that the few designs that I like the best are all rated "dry conditions." I did find a 2003 article on the UL site that suggests "dry conditions" lights would be fine for my use; but no updated information from the UL site is available to confirm that the standard remains the same today. Here is link to that article: http://www.ul.com/global/documents/offerings/industries/lighting/lightingindustryservices/articles/0803.pdf and relevant quoted section is as follows:

A dry-location luminaire must be installed in a location that is not normally subject to dampness but may be subjected to temporary dampness. Ventilation is often used to prevent an accumulation of moisture at the luminaire, but the proper amount of ventilation is critical in extracting the moisture from the area. A very common application of this concept would be a dry-location luminaire installed above a mirror or vanity in a bathroom. A luminaire installed in a shower, where it is in close proximity to steam and water splash must be a damp- or wet-location luminaire and marked "Suitable for Damp Locations" or "Suitable for Wet Locations."

I have never looked at the UL dampness rating when picking lights. My recommendation would be to select fixtures designated for specific purposes or locations. Just buy lights sold for bathroom use and you should be fine. In a powder room with only a toilet/sink almost any fixture will work.

If you were re-doing a bath/shower area then I would suggest water resistant light for over the shower only. The remainder could be the usual bathroom style sconces and flush mounts as long as the ventilation fan is used.