Wow!!! I knew I shouldn't have outed myself.Answer to question 1: no. It's regional. In the U.S. if you're talking about Asians, people will probably assume you're referring to people of East Asian, and South East Asian descent. In Europe they may add in a few more groups. As a British Indian friend once said to me, "I'm Asian, but you're Asian squared." She was trying to illustrate how she's considered Asian in England but not in the U.S., whereas anywhere I go outside of Asia I'll always be Asian.
Answer to question 2: It's only insulting if it's intended to be insulting. Other than that I just chalk it up to being outdated. In college I tried to reclaim "Oriental" by using it to refer to Asian stereotypes and cliches. That experiment didn't last very long. My fellow Asian classmates weren't buying into it, and my non-Asian classmates and TA's were always trying to correct me.
Asians who are offended by the term Oriental, are offended because of it's connotations. When I hear Oriental used to describe a people, the immediate images that pop up are dragon ladies, concubines, Suzie Wong and Charlie Chan, even if the speaker doesn't have those connotations attached to the term Oriental. I had a Korean roommate who identified herself as an Oriental, as she explained you're only Asian outside of Asia, but you can still be Oriental in or outside of Asia. She felt this was one way of keeping her identity as Korean from Korea. Outside of Asia and the Philippines I'm considered Asian and/or Filipino, but in the Philippines I'm "the American" or to be precise "the fat American who's charged double for a ride on a jeepney." I now hire a driver when I visit.