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The __W macro is needed because the token-pasting operator binds to the macro's argument immediately; Having WCHAR(y) expand to __W(y) means that __W is passed WCHAR's argument after it's been macro-expanded. Without the intermediate step, WCHAR(VERSION) becomes LVERSION.
As for the name - I have no objection to reasonable name changes. I picked WCHAR because it converts its argument to a wchar_t *.
Finally - I am aware that the HP/UX C compiler is broken. Unfortunately, I am required to work with it, and can neither replace it nor ignore it.