Let's think about a filing cabinet again. If the files in your filing cabinet were called letter1, letter2, letter3, and so on, you'd never be able to find anything -- the names aren't descriptive enough. The same is true on your computer -- you should come up with a descriptive name for each file that you create. Unix systems let you have very long filenames. A few older systems have a 14-character limit, but most allow names that are 256 characters long -- hopefully, longer than you will ever need.
Generally, a descriptive filename summarizes the contents with a few useful words. letter is not a terribly useful summary, unless perhaps you've only ever written one letter and don't expect to write another. The recipient's name (JohnShmoe, for example) would only be a useful summary if you expect to send only one letter to that person. Even if you only plan to send one letter, the name doesn't tell you anything about what you sent Mr. Shmoe.
OctoberGoldPriceTrends is a pretty good summary; it's obvious what the contents of that file are, though you might want to know to which year it referred, looking back two years from now. I often start time-specific files with the date, so that ls sorts the files in date order. If you do this, I recommend a YYYYMMDD format to get proper sorting, so files look like 20021004-GoldPrices. If you're going to have regular updates to something, you might want to make a directory to hold those things (e.g., GoldPrices/20021004, GoldPrices/20021108, GoldPrices/20021206, and so forth). Note that in this specific example, a filename of nothing but a date makes sense, because you don't have anything else in that directory but information on gold prices.
Bruce Barnett has suggested that, by using long filenames, you can create a simple "relational database." For example, you could find out everything you've recorded about the price of gold with a command like more *Gold*Price*. Of course, if this starts to get very complex, using an actual database is much simpler.
Similarly, if you're a programmer, the name of each file in your program should describe what the code does. If the code diagonalizes matrices, the file should be called something like MatrixDiagonalizer.cpp. If the code reads input from bank tellers, it should be called something like teller_input.c. Some programming languages even enforce this by requiring a particular file-naming convention; Java requires files to have only one object per file, and the name of the file and the object within it must be the same. (Of course, if your object names aren't very good, you're right back where you started.)
-- DJPH
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