What's in a name?

I've been pondering names for the last few days, trying to figure out what to call my new characters.  At some point, I should probably break down and buy a baby name book, but for now, I'm enjoying the name generator feature on Scrivener. I've also been reading EVERYTHING around me, looking for potential inspiration--street signs, package labels, news articles--you name it, I've been soaking it in.

I generally like to go with names that are more traditional rather than trendy. I think a traditional-sounding name fits well with the type of stories I write, and my characters seem to respond to them, which is always a good thing.

I also consider how the name 'sounds' to the reader.  I don't want my readers to have any trouble pronouncing my character's names.  I know it always throws me out of the story if I have to stop and sound the name out in my head every time I read it.  I think character names should help the story flow, rather than act as a distraction.

And then there are the names that I can't bring myself to use--those of my family and close friends.  It always rattles me a bit when I encounter a book that uses the name of my brother or my dad for the hero, and I have a hard time enjoying the story because I always picture my family instead of the character.  Just one of my strange quirks, I suppose. :)

What about you?  If you're a writer, how do you name your characters?  As a reader, are there certain names you enjoy and those you hate?  How do character names affect your enjoyment of a book?