I read in a baby-naming book that in some countries, it is illegal to name your kid embarrassing puns.
I'm not a fan of blatantly funny names in my games, that's more the place for nicknames that come up out of events during play. I don't mind mundane names, though, as long as they have a resonably long pedigree. Names like John and Joseph are pretty ancient and have stood the test of time. I don't have problems with PCs using them. In fact, I'd rather use them than some of the tortured names that come up in attempts to sound like they come from a fantasy culture.
As far as real life names I've encountered that are embarrassing, I haven't met too many personally, and only heard of a few more.
Sandy Brooks
Mickey Morse
And, my wife's aunt, who works in a large metro school district, encountered a young girl whose name was very interesting. For those of you who are Seinfeld fans and remember how he was trying to remember the name of a date whose name rhymed with a part of the female body (Dolores), well, this poor girl was the opposite of that. Her name WAS the body part that rhymed with Dolores... because her mother thought it sounded pretty but, apparently, didn't know what it was.
Poor kid.