I tend to recycle names I liked but didn't use in older aborted stories I have written in the past, usually with a slight change to keep it fresh.

The main city in my story, Demazon, is modified from another city I had called Del Mason, and a smaller but as important placename is Port Thafirton, which is a leftover from an RPG I used to play (which came from frequent discussions about what to call that first town, before we abrdiged it to Thafirton).

With naming conventions, and usually for the more important places, I take into account the possible history of the place, who originally founded it, what language they spoke might have sounded like, all that sort of stuff. Nothing specific, unless specifics are strictly required for the sake of the story, but enough so that the place name might tell a little part of it's own story in itself.

For unimportant, uninteresting or anywhere else, I usually just look in a phone-directory and bastardise the names that seem in keeping with the region at hand.