You make a good point, but if they're still going to offer a CD installation method at some point, The multiple version numbers are going to get confusing for some people, and they won't know which version of Ubuntu to have loaded and may install 8.04 by mistake.
Perhaps the versions could be released as LMCE "0710.0810", with the minor version referencing the date (which is just a mouthful). Judging by the staggered history of LinuxMCE releases, I think it'll be fine to call it "0710", as I imagine the devs will eventually get it to the point where LinuxMCE versions are released a certain number of days (i.e. a month) after, or to co-incide with a Ubuntu release as I'm sure was their aim.
I know what you mean about the name referencing the Ubuntu version. But there's no reason the LMCE version has to reference the Ubuntu version. In fact, unless LMCE starts exceeding the Ubuntu 6 month release cycle, which I doubt, the Ubuntu name tells you to install it on top of the most recent Ubuntu to the LMCE date name. In fact, if LMCE ever releases a version that isn't compatible with its most recent version of Ubuntu (or whichever distro it's based on), then it's got serious problems that would demand a fork that could