Bukkit/CraftBukkit — comment on commit 792fe3e8c611f7a8aa0390c4d2d384931b56e43d
File:  line 0
By khobbits:

setPlayerListName is just used to control the name displayed in the player/tab list.

setDisplayName is the craftbukkit display nickname.

This was correct as it was, at least for vanilla 1.1 clients.