I've just been musing on character names. I put a good deal of time into selecting names for my characters--perhaps more than I ought--and I'm not sure sometimes where to draw the line.
It's clear to me that, as in everything else, we have less latitude in fiction than the degrees of freedom granted to reality. I don't know that there is a Philip Space or a Ben Dover out there in the real world, but there are certainly Kelly Days (most of them probably unaware they are bearing a punning name). Joke names in a novel strike me as a little too sophomoric, but it's amazing how far some writers have pushed that envelope in comic novels. Although the characters Benny Profane and Herbert Stencil in Pynchon's V. aren't exactly punning constructions, they go far beyond the limits of credulity; but, then, Pynchon clearly didn't want us to be involved in his story in any traditional sense.
Here again, reality has us at a disadvantage. If I had an actor as a character in a novel, even a comic novel, I wouldn't name him something like "Rip Torn." But Mr. Torn (whom I admire) is only the latest in a family of Torns where the older males were nicknamed "Rip." In life, it's a conversation starter. In a book, it would be a bit silly and distracting (cf. Benny Profane).
To take another example, until recently the CEO of the Boeing Company was a man named* "Harry Stonecipher." Could we get away with that? No way--not unless we were writing a sequel to V..
But there are milder forms. I have a good friend named "Steve Steele." That's a fine name, but iffy in a novel (and, in my opinion, only serviceable if the character is not any kind of action hero). "Steele" in its possible spellings is a common surname (although famous Hollywood producer Dawn Steel inherited the surname from a father who changed it from Spielberg). But use it in a book and it seems as if the writer is trying to make some not-too-subtle point.
I used to know a fellow named "Bob Dollar." That's a fine, solid surname deriving from the Celtic. (It means, roughly, "from the dales," and has no connection with currency.) Nothing wrong with "Dollar" in real life. But it would be poison in anything but a comic novel, and maybe a little sketchy even there.
There are some names that, for me, land right on the line. "Billy Pilgrim," for example, in Vonnegut's Slaughterhouse-Five, is a feasible and undistracting name for a protagonist--except that it is a little too, as they say in screenwriting, "on the nose." (It also seems to be begging the critics and scholars to dissect it.)
I would never intentionally give a character the initials "J.C.", though writers from William Faulkner to Stephen King have done exactly this, quite purposefully and thematically.
Even though readers will suspend disbelief, at some level they remember the writer is up above the stage, pulling the strings. Names carrying too much obvious baggage or portent seem to aim the spotlight away from the stage and up at the writer. (Which a writer like Pynchon probably desires.)
I can enjoy preposterous and unlikely names as long as they aren't overly burdened with meaning. To take one of Vonnegut's recurring characters, how can one not like "Kilgore Trout"? Dickens was especially delightful and prolific in this regard, although some of his wonderful surnames are so marvelous as to be distracting. (Honeythunder? Pumblechook?)
Many writers can't resist saddling minor characters with real but unusual surnames. I've encountered the English surname "Gotobed" at least a hundred times in novels without ever bumping up against it in the real world. This is never laden with meaning; the writers have simply been amused by the name, and decided they needed to use it someday, somehow, for something. (It always knocks me out of the story by making me think of the Monty Python skit featuring a fellow named Smoketoomuch.)
Of course, what is unremarkable for one reader may be startling for another. An Iranian friend of mine told me that when he first moved to England for college he cold hardly resist laughing every time he met someone who was named for a color: Mr. Green, Mrs. Black, Mr. Brown, Miss Grey...
I'm rambling, here (and, yes, I'm stuck for a surname in my novel at the moment).
I prefer names to be somewhat evocative, but more enigmatic than emblematic. One of my favorites is Orwell's "Winston Smith," a pedestrian surname preceded by a Christian name with aspirations. It's a name you can spend some time considering, but also a name you can skate right across without a second glance. If you want to read something into it, you can, but it doesn't demand anything from the reader.
Ultimately, though, I pick names because I like the way they sound--and because, in my mind, they fit the character. By that I don't mean that they fit the character profile, or the character's thematic role. I mean that in in my mind's eye, if I call the character by that name, they answer.
* n.b. English versus Americanlish:
An interesting divergence of usage has emerge in how our two countries use the word "called" with respect names. In the UK, "named" and "called" are apparently used interchangeably. In the UK, it seems that "In the village lived a man called Smith..." means nothing more than that there was a fellow whose name was Smith.
In Americanlish, "called" is generally used to identify a label for a person which is not the person's given name--that is, the person is named one thing, but called another: "The man named Smith was called Little Smith to distinguish him from the three other Smith families in town in the town..."
BRIT: "In the village lived a man called Smith..."
YANK: "Why did they call him that?"
BRIT: "Well, because it was his name, I suppose."
And a unassailably good reason for calling him that, too. But to the American ear, it seems as if an element of the story is being left out...