User Profiles

In case if you don't know there is a hidden list named "USER INFORMATION LIST" which displays all the users of the site (collection) {MOSS / Sharepoint 2007}. And there is a page "Simple.aspx"  which show this list, the url for the page would be http://URSITENAME/_catalogs/users/simple.aspx normally no one has access to this list (except for the admin) and as the list is hidden it is not viewable in the "view all site contents" too. You will have to open you site in SPD and then click on _catalogs + and then you should see the "USER INFORMATION LIST" under it. 

WSS sites (including those within the sites collection of a portal) have something called a User Information list that keeps a limited amount of info about it’s users (login name, email, display name).  When a user is granted access to a site, their info is put in a User Information list.  When a user creates/edits an item in a list SharePoint creates a link to the user’s record in the User Information list so when the user is shown in “Created By” and “Modified By” indicators, the Display Name from the User Information list is shown

SharePoint Portal Server has something called a Profile Database.  When you first visit a portal, SPS checks to see if it has a profile for you and if not, it creates one on the fly with your info from AD.  You can also configure SPS to automatically populate the Profile Database with a full import, an incremental update, and optionally set it to pull objects with a custom LDAP query. 

A lot of use information can be obtained from http://msdn2.microsoft.com/en-us/magazine/cc163287.aspx

 More to come on this subject soon...as it seems there are circumstances (I don't know what they are YET!) where a display name of a user or group can change in AD but not get updated in SharePoint.  There are timer jobs that should update this info to match AD, but something happens where this doesn't happen.  Updating this content directly may be required, but of course this would be UNSUPPORTED modification of the database.