It was not so long ago when I made my intentions known that the .svc extension in Windows Communication Foundation (WCF, previously - Indigo) is really a clutz. It is obstrusive and really unnatural, especially when it comes to RESTful Web Services.
In a closed door meeting with the product group folks back in 2005, before WCF rolled out and way before I joined the borg, I was told that this is a issue not with WCF itself, but by its web host - Microsoft Internet Information Server (IIS)
There are some attempts to hack around it but one of the best I have seen is to do URL Re-Writing: Off Jon Flanders here. You can see from the bottom of his post via Christian Weyer that this still will not work with IIS6 (damned legacies) but this will give you a good excuse to move to a Better, Leaner and Meaner IIS7, which is a complete rewrite of its predecessor. About time, I say.