@Suno_Regin: Absolutely it
does matter, and should
not be allowed. I can't help but wonder how you, after having been here for some time by now, still seem to not know about the naming policy nor the reasons behind it.
* No offensive or vulgar names. (Swearwords, insults, etc)
* No names using repeated letters. (No more than 2 of the same letter repeated together)
* No adjective, verb or title as firstname. (Describing words, doing words, or titles such as Lord or Lady)
* No word combinations to make phrases or sentences (either in one name alone or first and last names combined)
* Names must make sense to a Medieval Fantasy setting. (Nothing furutistic or Sci-Fi please)
* No names of popular culture (fictional/non-fictional), or trademarked (companies, characters, placenames) real or unreal.
The reason is (or
should be, anyway) obvious, and has been stated many times by now: by using a name from another character you force everyone who comes into contact with that name in PS to recall the char you stole the name from. That in turn will not only lessen your credibility as character in PS, and create expectations that you cannot live up to, it'll also break the other person's immersion. So in fact you lessen other's ability to enjoy PS, and that's why it's not acceptable.

@ bilbous: For this effect to happen it doesn't matter whether your intention was to steal a name or make a reference. Noone knows (also, you could be lying in saying that it wasn't intended) and even if, they'd
still keep being torn out of immesrion by it. Thus, intent cannot validate a name.
If someone who has never heard of "George Washington" and thought that was a perfectly suitable name for PS and used it, it'd still need to be changed for exactly the same reasons.
Regarding the names that shouldn't be ingame but are marked as "taken": This sadly is the truth, and cannot be avoided, but is in no way a justification for trying to get through with an unsuitable name. Some names will always slip through, be it because the char didn't get played for a time sufficient to get it detected, be it that it got banned but not renamed beforehand, or because no GM actually knew the name to spot it. GMs are normal people, and thus can't be expected to know each and every book, movie and game, even popular ones. And Warcraft can be reasonably classified as "popular".
This is, BTW, one of the reasons why each and every player should actually report names (using /petition). If the players start condoning bad names (even if only by saying "That's not my business"), the GMs will slowly grow distant from the players, and vice-versa, and this'll lead to the RL "evil government" effect. Also, it
is your business, because they directly harm you by decreasing your ability to enjoy PS (unless, of course, you are here for the wrong reasons, in which case there's another problem). So yes, it is your business, and you can be expected to report bad names. I always do.
Talking to the one with the unsuitable name sometimes actually works, but most of the time you merely get a response like "You can't do anything about it, so shut up!" or, at best "I think it's OK.". Thus I only talk to those who seem like they <Xsarc>truly didn't see the word "random", didn't notice the big "?" and overlooked the pop-up. You'd think that'd be "noone",</Xsarc> hence I also talk to those who seem to be RPers. Usually, I use /tell for that, unless there's noone else around to be disturbed by the OOC.
@Nerule: AFAICS your name is sufficiently distorted to not create the aforementioned effects so IMO it's fine.