This discussion reminds me of some points I described in my book "Practical Development Environments". They're on my blog in more detail
(http://toolsmiths.blogspot.com/2007/11/choosing-project-names.html) but basically:
Keep it short
Since project names may appear in filenames or source code, shorter project names are preferable; four to six characters is common. Longer names will only be abbreviated anyway, and usually in two different ways.
Use distinctive sounds
Project names should sound different from each other when spoken aloud by people whose native language is not the one used by the rest of the group. Even if everyone speaks English, having two projects named "ctest" and "seebest" is too close for comfort.
Use low-frequency letters
It's much easier to be confident that all references to a project name can be found if the name contains characters that are less common in the local language. This is a good argument for choosing project names that use unusual characters, such as the letters q and z for English.
Make it unmarketable
Sometimes a project name will be reused as a product name, but not if it is already trademarked, or if you make it odd or crude enough! Project names don't have to have a theme, though that can be fun. They don't even have to be meaningful, just memorable with an obvious way of pronouncing the word. You can choose a number of suitable names once and then let people decide which one they want to use next. Names of stars, types of sushi, rare diseases, and characters from comic books are some ideas to start with for project names.