The scene's clear in your head. The characters are running around creating drama, making their own lives difficult but yours easier with every passing word. Until you realize you don't know the name of that brown-eyed beauty and her Prince Charming lacks an identity of his own.
1. Avoid Similar Names
Picking names that rhyme or derivatives from the same name are great ways to confuse readers.
Give your major characters names that all start with different letters because when the story gets intense, readers only skim-read the name and might miss Prince Charming's appearance if he's Terry and your princess is Tory. If your protagonist is Tory, the entire letter “T” and everything ending in “ry” are both reserved for her.
If you're stuck, check out BabyNames.com and BehindTheName.com for some ideas. Don't forget Surnames.BehindTheName.com to make sure the last name you've chosen is consistent with the ethnicity of your character.
2. Make Them Pronounceable
This tip doesn't apply to all genres but realize that your book will probably be read aloud at some point in time. Even if you don't choose a common name, choose a name that easy to decipher.
Remember when Harry Potter first came out? No one knew how to pronounce Hermione Granger's first name. In my family we said “Herm-ee-own” until book four when J.K. Rowling actually wrote pronunciation lessons into a scene.
3. Listen in Real Life
Sometimes you come across a person who's got a great name (or a horrible name). Take note, store it for later, and regift it to a character.
Note: if the character dies, you might want to give a heads up (and a complementary copy of the book) to the person whose name you stole.
How do you name your characters?
Write about a princess. Be creative.
When you finish, post it in the comments and comment on a few other practices.