You can just type it any time you like. Your name will change ingame immediately. It maybe defaults to some weird place like my OS, but I can change it at will. This is good. However, it is still dumb. It certainly should default to something relevant. Steam name will do. AND, as I CAN type it, there should be some indication that I can type there. An invitation of sorts; or instruction.

The last patch changed the character name behaviour. The name is now taken from the profile of your OS afaik and not from steam anymore.

I see now.

The simplicity of the solution does not excuse the simplicity of the problem.

There needs to be some indication that I can type there. None of my friends knew that either. One friend was walking around with the name PLAYER 1. Frankly, I noticed it because I found a Youtube video.

Click your username in the menu and change it. Presto.

actually it is not the real OS profile name either wihich is a bug kinda:
it's the first name of the used profile (the one choosen at it's creation)

I have changed it after it's creation.

My profile name is now (let's say) "xy".

Before it was just "x".

The profile folder (in C:\Users\) is still called "x", but my real profile name is different from that.

I would prefer the Steam name as the default character name over the OS profile's one though.

If you want to stay with the OS profile name, then pls use the correct Win API:
http://msdn.microsoft.com/en-us/library/windows/desktop/ms724432%28v=vs.85%29.aspx

Hi,
thank you for your report. We have noted your suggestion about making the interface more user-friendly.
Regards,
Andy