What are the naming rules for named instances on a cluster? I am planning to install two SQL Server 2008 instances on an active/passive cluster. Each instance is supporting the same application, but the DBs will be supporting specific geographic locations. I'd like to name the instances to reflect the name of the application and the site, factoring in that at least one instance will be a named instance. 

My understanding is that the SQL Server Virtual Name has to be registered in AD and can only be used once. If this is true, I can not have instances on this cluster named \EAST and \WEST as the  can't be registered in AD more than one, or can I?

Can I have two named instances on a cluster with the same base instance name or will the base instance name have to be unique for AD registration purposes?
You are correct in noting that the virtual name needs to be distinct. I'm having a hard time understanding what you're describing so I'm going to try to lay it all out.

SINGLE INSTANCE FAILOVER CLUSTER

If you're truly looking for "Active/Passive" then you're going to need at least four servers - two nodes for each instance. Let's call the instance SQLPROD-EAST.

You could then have:

Node A: SQLPROD-EASTA
Node B: SQLPROD-EASTB

Virtual Name: SQLPROD-EAST


as your nodes.

The virtual name would be SQLPROD-EAST and you'd install the default instance of SQL Server would would take the name SQLPROD-EAST. You'd then replicate this topology with SQLPROD-WEST:

Node A: SQLPROD-WESTA
Node B: SQLPROD-WESTB

Virtual Name: SQLPROD-WEST


MULTI-INSTANCE FAILOVER CLUSTER

This is where your description got confusing because it seems like you began describing Active/Active. This might look like:

Node A: SQLPRODA
Node B: SQLPRODB

Virtual Name: SQLPROD


as your nodes.

The virtual name would be SQLPROD and you'd install two named instances of SQL Server SQLPROD\EAST and SQLPROD\WEST.