Short names were originally implemented to maintain compatibility with programs that could only handle filenames in 8.3 format, meaning 8 characters, a dot, and a 3 character extension. This short name compatibility really bogs down the NTFS file system.
To disable the generation of short names, go to regedit and set
This and similar registry keys are found in Windows XP, Vista, 2003, and perhaps other versions of Windows that use NTFS.
Setting the key doesn't eliminate existing short names, but it does stop new ones from being created.
You'll have to reboot for the changes to take effect.