I think there's a difference between exotic names and names that are cruel as well as unusual. Naming a baby girl Arilyn, Aeryn, or Liriel, or naming a baby boy Kieran, Luke (a biblical name, as well as a Duke of Hazzard), or Griffin (isn't that a Welsh name?), meh, doesn't seem so bad to me. Moon Unit, Female, etc., yeah, those are more than a little questionable.
Remember, many fantasy names are real names drawn from languages other than English, so the parents of people named Siobhan or Aidan (pre-Sex and the City) aren't necessarily gamers or even fantasy fans. My cousin and I are both too old (37) to have been named for a Waterdhavian guard or a Cormyrian Purple Dragon, respectively, and our parents are definitely NOT gamers; they're just Irish.
As for giving a child a "normal" middle name and using that instead, I have bigger doubts about that--inevitably, as they grow up, people will use their first name, and it gets confusing when people call them two different names. That's coming from personal experience--half the people I know call me Aidan (it's a family name, btw), the rest call me Chris (my middle name is Christian), and people who don't know me and hear both think I'm giving them a fake name somewhere. It usually works out ok, but it can be awkward sometimes. Anyway, those are my thoughts, and about as much as I can muster on a Sunday morning.
P.S. Just remembered, my screen name is also an Irish name, but in this case it's the name of a 1st-edition half-elf druid I played for a couple of years, and was lifted straight from Tolkien. In The Two Towers, Finglas was one of the oldest Ents, and was too sleepy and tree-like, IIRC, to help out with Saruman and company.
