Can vs. Could

Well, if there is a rule, it is that can means ability, and could means possibility. The issue is confused by a few things. One is that could is the simple past of the verb can. I can run a mile in six minutes. When i was a young man, i could run a mile in six minutes. Another problem is ambiguity. One might acknowledge the ability without saying if there is a possibility. Can you lend me five dollars? I could. In such a construction, using could is not actually an answer to the question, and is often in fact a means to avoiding an answer. I could (when bloody Hell freezes over). Could is also considered more formal. In your example "Could you tell me the way to the castle?" the use of could is a more formal, and often a more polite way of asking your question. But it is important to remember that could, in the present tense, is a conditional verb, and native speakers often leave the condition unspoken. "Could you tell me the way to the castle (if you would be so kind)?"

Beware of people telling you that this or that is a rule in English usage. Something might be grammatically correct, and still not be something which a native speaker is likely to say. Usage is not a matter for rules, but for custom. In an example such as yours, can and could are interchangeable. But that is not always true. I might go so far as to say that it is true in most cases, but not in all cases.

It could be true.

It is more polite when you use "could" to ask someone for help.
Especially when it comes to a stranger,it is better to say "Could you tell me how to get there?" or "I was wondering if you could tell me how to get there"

Thanks for the responses. I was sure "could" is used in polite circumstances but I thought to find a "Little-Brown" type of general rule on the matter. Couldn't find it in the Harbrace College Handbook either. My co-workers asked (as Japanese English teachers will) what the absolute rule might be, but accept the simpler explanation that "could" is more polite than "can" in many cases.