I personally believe that as an italian guy I should confirm that the name is very appealing! Just to pinpoint a detail though: pine nuts are a fundamental ingredient of pesto, but just not the main one. Of course we may use nano as a base for szabgab's IDE, which would bring us to... nesto? No, I don't think so, since it's horrible. OTOH serendipitously it suggests me of nest, which IMHO is fine albeit not Perl-related in any way I can think of. A nest, in fact, conveys the idea of (a nice and warm) environment. There only remains to find a suitable backronym for it, or not?
Well, how 'bout a self-recursive one: "Nest: Enhanced Sourcecode T..." D'Oh, I can't think of a suitable word beginning with T!
Well, sure, pine nuts aren't basil or olive oil, but basil's not a mail client AFAIK. It just wouldn't carry the joke the same.
"Pine nuts" is also a gentle nudge to all those who take pico and nano everywhere when there are "real" text editors like vim and emacs out there. No, I'm not going to start a second holy war in the same node by comparing emacs and vim to each other. ;-)
BTW, why aren't more people using joe to edit their Java?