Here's a link to a sermon by Phil Johnson on the third commandment, and the usage of God's name with good taste and Biblical propriety. In the message, Pastor Johnson talks about how using God's name lightly destroys reverence for what is holy and pure, and when you use God's name lightly or make jokes about Christ, what is reflected is a lack of fear for God and a defiance against the third commandment.
When you call yourself a "Christian", you are taking the name of the Lord and using it for yourself, and while there is nothing wrong with this, you need to ACT the way that Christ would have acted in order to be using the name correctly. In the commandment, don't "take" the name of God talks about don't pick up/lift it up/use it in some form or fashion. To do it in vain means to do it in a purposeless, hollow way. If you aren't actually speaking to God, or specifically referencing his name, you should not use it.
The commandment also branches out into flippant usage of swearing, not profanity, but expressions like "I swear on a stack of Bibles", etc. Jesus confronted the Pharisee's should avoid flippant oaths, and passages like James 5:12 that speak about "Do not swear" but let your "yes be yes", yet at the same time, there are places for solemn oaths (marriage, or oaths made to God.) All oaths are solumn promises in which we call God to be our witness.
God's name can also be used in vain in our thoughts and deeds. To pray wrongly (superficial praying, or praying for the wrong thing) can also be seen as a misuse of the third commandment. If you stand in corporate prayer in the church but instead just flip through the bulletin or think other thoughts, this is a form of taking the Lord's name in vain. Singing praise songs without meaning the words, or thinking about something else, is misusing God's name.
Even if praying carelessly or meaninglessly over a meal, the Lord's name is being misused. Simply reciting Jesus' name at the end of the prayer doesn't make it more effective. Prayer in Jesus name means praying for that which he approves, that is consistent with his character.