Confirmed in lucid; The bug is actually as follows:
When you rename the bookmark on the pane in nautilus, it does not change 
(reverts back). When you close that nautilus session and open a new one the 
bookmark HAS renamed, BUT the name is still the same in the 'Places' drop down 
menu from the menubar. After a restart, the name has reverted back to the 
original even in the pane inside nautilus.

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Nautilus sidebar isn't updated after renaming bookmark from the sidebar
https://bugs.launchpad.net/bugs/549707
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