I have a solution, although you've probably figured it out by now.
Open up Control Center. Go to 'Appearance & Themes' --> 'Background'. Click the 'Advanced Options' button. In the window that comes up, you'll see a field labeled 'Width for icon text:'. By default, it's set to 'Auto'. Just change this to something else, like 100. You can also increase the number of lines for icon text. Click OK, then click Apply in the Control Center window. This only affects the desktop icons.
Some day, perhaps when KDE 4 makes its debut, little options like these will be slightly more intuitive. I would have thought that such an option like icon text width would have been under the Icon section of the Control Center...
I often find myself trying to creatively name icons in order to avoid weird little wrapping issues or the use of an ellipsis. Some sort of automatic per-icon text width adjustment would be nice, IMO.
Hope this helps!