The ensureUniqueNaming setting (which is true by default) in config/umbracoSettings.config is supposed to prevent nodes with duplicate names being created under a parent. However it seems to have a bug:-

Create node named Page at least 3 times :-
Page
Page (1)
Page (2)

Umbraco is making sure the nodes are unique by appending (x)

Delete any of the numbered nodes (apart from the last one)
e.g.
Page
Page (2)

Create another node named Page
Page
Page (2)
Page (1)

Still no issues at the point. However create another node named Page
Page
Page (2)
Page (1)
Page (2)

There now exists nodes with the same name (and url). The issue seems to be that if the nodes are out of sequence (this could be becase a node has been deleted or the nodes sorted) then umbEnsureUniqueName Action Handler fails to rename the nodes correctly.

I've fixed the Action Handler and will submit to Codeplex once tested - just posted here in case someone has the same issue.