An implementation of theme_username() shared at the 2012 UT Austin DrupalCamp - Theming 101 Session. Not sure of the original source. This should be pasted into your template.php file.

gistfile1.aw

/**
 * Implementation of theme_username()
 * Change theme_username below to your_theme_name_username
 */
function theme_username($object, $link = TRUE) {
  if ( !$object->profile_first_name && !$object->profile_last_name ) {
    if ( $object->uid && function_exists('profile_load_profile') ) {
      profile_load_profile($object);
    }
  }
  if ( $object->profile_first_name && $object->profile_last_name ) {

    $name = $object->profile_first_name . ' ' . $object->profile_last_name;

    if ( $link && user_access('access user profiles')) {
      return l($name, 'user/'. $object->uid, array('title' => t('View user profile.')));
    }
    else {
      return check_plain($name);
    }
  }

  // Profile field not set, default to standard behaviour

  if ($object->uid && $object->name) {
    // Shorten the name when it is too long or it will break many tables.
    if (drupal_strlen($object->name) > 20) {
      $name = drupal_substr($object->name, 0, 15) .'...';
    }
    else {
      $name = $object->name;
    }

    if ( $link && user_access('access user profiles')) {
      $output = l($name, 'user/'. $object->uid, array('title' => t('View user profile.')));
    }
    else {
      $output = check_plain($name);
    }
  }
  else if ($object->name) {
    // Sometimes modules display content composed by people who are/**
 * Implementation of theme_username()
 */
function theme_username($object, $link = TRUE) {
  if ( !$object->profile_first_name && !$object->profile_last_name ) {
    if ( $object->uid && function_exists('profile_load_profile') ) {
      profile_load_profile($object);
    }
  }
  if ( $object->profile_first_name && $object->profile_last_name ) {

    $name = $object->profile_first_name . ' ' . $object->profile_last_name;

    if ( $link && user_access('access user profiles')) {
      return l($name, 'user/'. $object->uid, array('title' => t('View user profile.')));
    }
    else {
      return check_plain($name);
    }
  }

  // Profile field not set, default to standard behaviour

  if ($object->uid && $object->name) {
    // Shorten the name when it is too long or it will break many tables.
    if (drupal_strlen($object->name) > 20) {
      $name = drupal_substr($object->name, 0, 15) .'...';
    }
    else {
      $name = $object->name;
    }

    if ( $link && user_access('access user profiles')) {
      $output = l($name, 'user/'. $object->uid, array('title' => t('View user profile.')));
    }
    else {
      $output = check_plain($name);
    }
  }
  else if ($object->name) {
    // Sometimes modules display content composed by people who are
    // not registered members of the site (e.g. mailing list or news
    // aggregator modules). This clause enables modules to display
    // the true author of the content.
    if ($object->homepage) {
      $output = l($object->name, $object->homepage);
    }
    else {
      $output = check_plain($object->name);
    }

    $output .= ' ('. t('not verified') .')';
  }
  else {
    $output = variable_get('anonymous', 'Anonymous');
  }

  return $output;
}
    // not registered members of the site (e.g. mailing list or news
    // aggregator modules). This clause enables modules to display
    // the true author of the content.
    if ($object->homepage) {
      $output = l($object->name, $object->homepage);
    }
    else {
      $output = check_plain($object->name);
    }

    $output .= ' ('. t('not verified') .')';
  }
  else {
    $output = variable_get('anonymous', 'Anonymous');
  }

  return $output;
}