I agree that the name generator needs to be changed radically. The names it produces right now are complete gibberish. Out of 30 names it suggested for a town, only 3 of them were ok, not great but recognisable, memorable and easy enough to pronounce. 5 more were usable with a little work, but the rest were trash.
The predefined lists are a decent solution, faction-specific ones would add a nice touch of flavor. Perhaps you could pick from several lists, not only from your own faction, but also from a general list for your race/allegiance.
To the guys that are saying 'why cant you think of your own names?' or 'you can easily modify the ones that are given into something you like', I'm playing a tbs, not the ****sims. The things you get to name are usually not that important that they all need an awesome personalised name, just an ok one will do most of the time. I really hate it when I get pulled out of a game because I have to name something and can't think of anything on the spot, thus having to refresh fifty times until something remotely usable comes along. This makes it feel like work and kills fun. If I happen to think of something fitting I'll use it. If not, I want to be only a few clicks away from a decent name. Doesn't have to be great, just good enough.