Well, this is of course conjecture, but I figured in those days names worked the same as in other cultures. That is, yes, they do have a literal meaning (just like "William" has a literal meaning), but they end up being, well, just names. It just strikes me as weird that a prophecy would call out a name if the prophecy actually meant the semantic meaning of the name. And I would also find it weird if Mary would call Jesus by the name Immanuel, because first and foremost Immanuel is a name, not the semantic meaning.
EDIT: Just read the page on Wikipedia. Not surprisingly, I find the Jewish interpretation more believable.
rumborak