When you are preparing your English translation of the Bible, it's perfectly acceptable to use God's name Jehovah in the Old Testament. Nobody who knows anything will you any grief about this. You can do it nearly 7000 times. That's how often the four consonant tetragrammaton appears in the original Hebrew.
Using God's name in the New Testament is a different matter. It is a bolder move, not without controversy. At first glance, it would seem that you ought to be able to do it without fuss. At second glance, it begins to seem that you have no right to do it at all. At third glance - you get the green light once again, and using God's name is okay. It's solid.
The New World Translation, the Bible most frequently used by Jehovah's Witnesses, uses the Name in both Old and New testaments. Many translations use the name in the OT, but as far as I know, only the NWT, among English translations, use it in the NT. (there are foreign language translations that do so) Believe me, Witnesses take heat for it. Critics constantly grouse that they've "written their own Bible," inserting favorite words without justification, simply because it fits their doctrine.
At first glance, why would you not use the name Jehovah in the New Testament? As any Bible reader knows, the New Testament is packed with direct quotes from the Old Testament. So, if the Name appears without controversy in an Old Testament verse, why should it not also appear when that verse is lifted and inserted into the New Testament?
But at second glance, it's not quite so simple as that. Ancient manuscripts of the Old Testament [Hebrew] contain the divine name, but ancient manuscripts of the New Testament [Greek] do not. Maybe you think they should, but they don't. That's strange - why would a direct quote pick up every word except the divine name? Nonetheless, as a translator, you have to translate what is, not what you think ought to be.
But at third glance, the picture changes again. Those NT writers didn't take their quotes directly from the Hebrew Scriptures. Starting around the 3rd century BC, Greek became the dominant language in that part of the world. Therefore, the Hebrew Old Testament was rendered into Greek in a translation that came to be known as the Septuagint, since it was produced by seventy scholars (actually 72). For the most part, New Testament writers took their OT quotes from this translation, not directly from the Hebrew writings.
Now, the Septuagint doesn't contain the divine name, either - that is, the Septuagint as we have it today. Instead, where you might expect to find God's name, you find kyrios, a Greek word that means lord. However, numerous early fragments have been found that do contain the divine name. Thus, it appears that the same sentiment (that the Name is too sacred to pronounce) which caused it to disappear in latter Hebrew manuscript copies also caused it to disappear in latter Septuagint manuscript copies!
Quite obviously, New Testament authors did not consult latter Septuagint versions - ones produced centuries after their deaths. They used the early versions, and these versions include the Name. The New World Translation (Large Print Version, with References) contain numerous examples, in an appendix, of early Septuagint inclusions of the name. So the translation is on firm ground to use it in the NT, even though few Bibles do.
George Howard of the University of Georgia writes this in Journal of Biblical Literature (Vol. 96, 1977, p. 63): "Recent discoveries in Egypt and the Judean Desert allow us to see first hand the use of God's name in pre-Christian times. These discoveries are significant for New Testament studies in that they form a literary analogy with the earliest Christian documents and may explain how NT authors used the divine name. In the following pages we will set forth a theory that the divine name, YHWH [alas, Howard uses the Hebrew characters, but I don't know how to do that on the keyboard!] (and possibly abbreviations of it), was originally written in the NT quotations of and allusions to the Old Testament and that in the course of time it was replaced mainly with the surrogate abbreviation for Kyrios, "Lord" [Again, he uses the Greek characters]. This removal of the Tetragram[maton], in our view, created a confusion in the minds of early Gentile Christians about the relationship between the 'Lord God' and the 'Lord Christ' which is reflected in the MS tradition of the NT text itself." [bolded print mine]
Not only did the removal of the Tetragrammaton create that confusion, but isn't its proper restoration, now that it is clearly found in the earliest Septuagint manuscripts, resisted by Trintitarians so as to continue that confusion?
Hmmmm....well...(I hear it all the time)...isn't it awfully suspicious that it's the Jehovah Witness Bible that uses Jehovah in the New Testament? Doesn't that mean they're writing their own doctrines into the Bible? No, it doesn't. What it means is that Witnesses love the divine name and so they highlight facts that are not highlighted (if not actually buried) by those who don't love the name. Since the name appears some 7000 times in the entire Bible, it's hard to argue that God doesn't want it known. Especially in view of .....
...that men may know that thou, whose name alone is JEHOVAH, art the most high over all the earth. Ps 83:18 (Old Testament)
After this manner therefore pray ye: Our Father which art in heaven, Hallowed be thy name. Thy kingdom come, Thy will be done in earth, as it is in heaven. Matt 6:9-10 (New Testament)
In fact, should not Christians be identified with that name?
[Peter] hath declared how God at the first did visit the Gentiles, to take out of them a people for his name. Acts 15:14 [all verses taken from the King James Version]
In spite of this, most churches today are moving in the opposite direction! Check this out in the Boston Globe:
The Vatican, saying the name of God deserves more reverence, earlier this summer instructed that Catholics stop using the word Yahweh in worship, a step that is expected to affect a number of hymns, according to the Catholic News Service. And now comes Christianity Today, the evangelical magazine, talking with Protestants about the issue. One of several perspectives reported in the article: "Protestants should be following their lead, said Carol Bechtel, professor of Old Testament at Western Theological Seminary in Holland, Michigan. 'It's always left me baffled and perplexed and embarrassed that we sprinkle our hymns with that name,' she said. 'Whether or not there are Jewish brothers and sisters in earshot, the most obvious reason to avoid using the proper and more personal name of God in the Old Testament is simply respect for God."
That's fine with us. Let the Name be associated with those who strive to keep His worship uncontaminated with non-Christian teachings - teachings like Trinity, hellfire, and so forth.
Open ye the gates, that the righteous nation which keepeth the truth may enter in. (Isa 26:2)
Perhaps its well that those who so misrepresent God don't even attempt to use his name. In fact, no one knows it's exact pronunciation....all we know are the consonants, the vowels are educated conjecture. I've even heard it suggested that perhaps Jehovah maneuvered matters that way precisely to assuage the concern Jews would later voice....that the name is too sacred to be pronounced by imperfect lips. That doesn't entirely make sense to me, since the name was pronounced accurately at one time. But....people go from bad to worse, and maybe God saw fit to take the proper pronunciation off the table for a time. I'm not sure if I buy that, but it could be.
[Edit: 4/25/10; see also here and here.]