The script below will allow you to change a users display name in SharePoint.

# add SharePoint snap-in if needed

 	$ntName = "domain\XXX"
	$displayName = "New Name"
 	$webApp = "http://webapp.sharepointed.com/"
	$user = Get-SPUser -web $webApp -Identity $ntName
	
	Get-SPWebApplication $webApp | Get-SPSite -Limit ALL | Get-SPWeb -Limit ALL | ForEach-Object {
		Set-SPUser -Identity $user -DisplayName $displayName -Web $_.URL
	}