A name can be a very large part of an identity, so I think that names should be chosen with care and purpose. Whether it's a person, a pet, or a character, I take naming very seriously.
Although I don't have any children, I have been part of naming people. Nicknames can be fun and fitting, but they can also be very cruel and inappropriate. Think twice before giving someone a nickname.
I have named many pets, and I find that my first instinct usually fits the pet nicely. Animals deserve names chosen with some thought too. One of our cats has a long-lost sister that was named Scurvy by the guy that bought her (Yes, he even told the humane society that he was buying the cat to be a frat house mascot, and they sold her to him anyway).
The story I'm writing at the moment is part political conspiracy part dystopian adventure, and it features a character that I haven't named yet. I just can't think of a name that fits him. He is one of two main characters and the story won't get moving until I have something to call him. I hope it comes to me soon.