To my knowledge, the Active Directory display name is automatically used by TFS 2010.
(here, here and here for discussion, the syncnamechanges function - this may give you something to look for, to learn more about how this works)
I believe that you can change the names used in TFS by simply changing the display names in your Active Directory accounts, but this, of course, will have a global effect, which may be undesirable. I am not sure if there is an alternative, for example, disabling syncnamechnages and returning to simple text fields for these fields.
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