This is something that is way the hell out of my usual specialty, but I once had the privilege of going to Royal Ascot. While there, I overheard a lot of griping over the irritation of finding suitable names for racehorses, and it interested me enough to look it up later. Since it's been 10 hours and you haven't gotten an answer from someone with more firsthand knowledge of the matter, I'll do the best I can.

Blame the Brits: Assuming that the people in stupid hats weren't lying to me (always a possibility because getting sloshed appears to be the main attraction of horse races, in addition to losing truly offensive sums of money), the "unconventional" names you see on racehorses today are largely a function of Thoroughbred registries' restrictions. The British registry developed a set of rules over the course of the 20th century that is now in use with its sister organizations around the globe, and as time has gone on, the number of permitted names has gotten smaller and smaller for an ever-increasing number of reasons. One of them that's gotten a lot more cumbersome as time's gone on is simply that famous racehorses' names are "retired," in much the same way sports teams retire the numbers of famous players. There are currently about 3,000 names that can't be used for officially-registered Thoroughbreds anywhere in the world for that reason alone (the International List of Protected Names that you'll see referenced below).

The Jockey Club, which is the Thoroughbred registry for the U.S. and Canada, has its rulebook available online so I'll use that. While its rules are technically only for these two nations, anyone wanting to race a particular Thoroughbred on multiple continents would have to pick something that can safely be registered everywhere, so this is as good a place as any to start.

Mint julep time: Assuming for the moment that you've acquired a very fast horse, a very stupid hat, and a very large drink, now all you need is a name, but that's easier than it sounds. This is the list of prohibited naming practices for registered Thoroughbreds in the U.S. and Canada:

• Names consisting of more than 18 letters (spaces and punctuation marks count as letters)
• Names consisting entirely of initials such as C.O.D., F.O.B., etc.
• Names ending in "filly," "colt," "stud," "mare," "stallion," or any similar horse-related term
• Names consisting entirely of numbers. Numbers above thirty may be used if they are spelled out
• Names ending with a numerical designation such as "2nd" or "3rd," whether or not such a designation is spelled out
• Names of living persons unless written permission to use their name is on file with The Jockey Club
• Names of persons no longer living unless approval is granted by The Jockey Club based upon a satisfactory written explanation submitted to the Registrar
• Names of racetracks or graded stakes races
• Names clearly having commercial, artistic or creative significance
• Names that are suggestive or have a vulgar or obscene meaning; names considered in poor taste; or names that may be offensive to religious, political or ethnic groups
• Names that appear to be designed to harass, humiliate or disparage a specific individual, group of individuals or entity
• Names that are currently active either in racing or breeding
• Names of winners in the past 25 years of grade one stakes races
• Permanent names: The list of criteria to establish a permanent name is as follows: a. Horses in racing's Hall of Fame; b. Horses that have been voted Horse of the Year; c. Horses that have won an Eclipse Award; d. Horses that have won a Sovereign Award (Canadian Champions); e. Annual leading sire and broodmare sire by progeny earnings; f. Cumulative money winners of $2 million or more; g. Horses that have won the Kentucky Derby, Preakness, Belmont Stakes, The Jockey Club Gold Cup, the Breeders' Cup Classic or the Breeders' Cup Turf; and h. Horses included in the International List of Protected Names
• Names similar in spelling or pronunciation to the classes of names listed in Rule 6(F) 6 - 14 above
• Names of horses previously recorded in The American Stud Book by the same sire or out of the same dam as the foal for which the attempt is made
• Names of horses appearing within the first five generations of the pedigree of the foal for which the attempt is made

And the final turn of the screw:

• In addition to the provisions of (the rules just given), the Registrar of The Jockey Club reserves the right of approval on all name requests.

As you'll see, there are quite a few rules, and the number of permitted names falls every year as new horses win major races. Owners/breeders are constantly on the hunt for something that will satisfy the registries' rules, and as a result, most of the Thoroughbred names you'll see look a bit strange to those of us more accustomed to naming our animals Mittens or Killer or Mxyzptlk.

Edit: And if you're curious about seeing how they figure out what's available and what isn't, try this: The Online Names Book for the Jockey Club. Owners can check potential names here to see whether or not they're available.