A common issue is that, even though display names in AD may be "FirstName LastName", they are not pulled into SharePoint, letting display names in SP default to "Domain\Username".
The solution: Make sure the account used to import users is trusted by the domain (controller). You have to give it perms to access things like display name and email address.
Take our former situation for example. Here, we have Domain-A (which has the DC which most user accounts are on) and Domain-B (where our MOSS servers are). Domain-B trusts Domain-A, but not the other way around. All MOSS-related system accounts were originally on Domain-B... So, they would pass credentials on to the DC on Domain-A (because B trusts A), but could not get display names, email addresses, etc. from the DC (because A does not trust B).
So we had to create an account on Domain-A to query AD. We then set said account as the one that imports profiles:
- In Shared Services Administration, go to User profiles and properties -> Configure Profile Import.
- Under Default Access Account, we input credentials for our Domain-A account with read access on AD. Problem solved, on to the next one!