We used DH's father's name as a middle name for DS, to honour him as he died when DH was young. Our other parents are still alive, thankfully.
Now we're having a girl, I had thought using ,y Grandmother's name as middle name this time round. She was great, truly one of a kind :) However her name really doesn't go with the first name we've chosen, nor do other family names I can think of.
We could just chose any old name we like I suppose, but it seems a bit odd to use a family name for DS and not for DD, what do you think?