I think it would work best to,
1. Keep the character name's that we're used to.
2. Change whatever weapons and items names might have been altered for censorship (Remenber FF4's 'Black' sword?).
3. If the guy who goes on about how he loves his root bear, and the lady who scolds him for having had enough sugar for one day really are just blatant censorships, leave them anyway. They don't affect the story, we know what they're really saying, and its simply funnier this way (like spoony bard).
4.In the case of Diologue, if a retranslation doesn't put a different spin on things, make it clearer, add more plot that was left out or simply leave a better dramatic impression, leave it alone. The characters each have their own voice, and the more tampered with the diologue is, the easier it is to change that voice entirely. This is only for your party/ other major characters though. The NPCs roaming cities and such could have their diologue changed however.
Just my 2 cents