In most cases, the code names are meant for internal use only within Apple. but are often adopted by the general public or media to differentiate different versions.
For example, a WallStreet Powerbook, a Lombard Powerbook and a Pismo Powerbook look very much the same, although there are some differences, they are close enough that referring to them by their code names help tell them apart.
Same thing with modified names. The TiBook, for example, is a way to explain it's a 15" PowerBook G4 with titanium casing, but in a simple one-word phrase.
The current iBooks are often referred to as iceBooks because of the white outer casing. So people don't confuse it with the original iBooks available in several colours (Bondi-blue, Tangerine, Blueberry, Graphite, etc)
OS X versions 10.1, 10.2 and now 10.3 are often referred to their code names Cheetah, Jaguar and Panther as this is a bit more definitive a name than a simple 0.1 number change. The differences are not subtle between these versions although the proper numbering of them would make one believe so at first glance.