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We used same first-letters and similar sounding names to name our girls after beloved grandparents. Lena (Helena Beth) is named after Josh's grandmother Helen and my grandmother Betty. Mikaela Benjie is after my great-uncle Mac and grandmother Clara (Kayla) and Josh's grandfather Benjamin. I like to tell Lena stories about her great-grandmother, whom I was so close to growing up, and connect her to her maternal line. She also loves that the engagement ring I wear belonged to her papa's mommy, whom she was named after!! As they grow we can tell both of our girls about the relatives we loved, what we remember about them, and their qualities that we hope will continue on in our children. We thought of parallel Hebrew names at the same time-- Chana Batya for Lena and Michaela Binyamina for Mikaela.
Not everybody names in this way, though. Often couples will give their child an English name and not a Hebrew one for years later. They may keep the same "parallel" name (Rachel... Rakheil for example) or they may come up with something totally different, either honoring the memory of a deceased (perhaps newly) relative, or picking a quality of their child and giving them a meaningful Hebrew name. One friend of mine named her daughter "B'racha" in Hebrew, which had nothing to do with her English name, but because she was a "blessing" to be born after the mom suffered from devastating miscarriages. Another waited until some grandparents had passed away, only then giving the child a name after relatives who had the blessing to have known her.
However you think of your child's name, it's a big responsibility, something that they will carry around with them their whole life (if they don't change it on you!). Looking for a Jewish baby name? Check out this search feature on kveller.com: http://kveller.com/jewish_baby_names/