I think Funcom should have gone with a random name generator exclusively, instead of allowing players to choose their own nicknames. There's nothing that destroys immersion for me quicker than seeing players named Kidrock, Damastahh, and Eatpoopoo. Yeah, it really makes me feel like I'm running around on Rubi-Ka when I see that kind of stuff. I've already turned off all chat so I don't have to listen to all the OOC conversation, but I can hardly escape seeing peoples' names.
On the other hand, some of it's admittedly not the players' fault. Most of the more obvious and normal-sounding names have long been taken. Anyway, I'd prefer it if the game assigned random first and last names, more or less like it does now, but with the nicks done away with altogether.