How can setup a friendly email name in the MailSetting section of web.config?

Well, in code you need to put the sender's name in quotes, followed by the e-mail address.

new SmtpClient(...).Send("\"John Smith\" jsmith@somewhere.com", ...);

And...it looks like you can encode it into the attribute too...

<smtp from="&quot;John Smith&quot; &lt;jsmith@somewhere.com&gt;">