http://theboard.byu.edu/questions/82590/
A friend and I had an interesting conversation about this once, spurred by the observation that we still translate the names of popes and (sometimes) monarchs into local languages, but not other names. (So Elizabeth II is "Isabel II" in Spanish, "Elisabetta II" in Italian, "Erzsébet" in Hungarian, etc., but Elizabeth Taylor was known as "Elizabeth" in all of those languages.)
We decided that it probably had its roots in a time when educated people all spoke the same language (e.g., Latin), but different local vernacular languages/dialects. So, if you were used to translating your name into the more prestigious language but also being called by your name in the common dialect, it's not much of a stretch to translate your name into all of the local dialects, if necessary. And since both royalty and popes are part of institutions that existed when Latin was commonly spoken, perhaps that's why we carry on the same tradition to this day.
#82590 - Translation of names
Moderator: Marduk