Yes, I know a lot of greek and italians that use yia-yia and Nonni (not sure of spelling) which I don't mind at all. I actually find it refreshing.
I am more against allowing children to continue speaking baby talk long past their toddler years, and I think grandparent names are one of those areas it is so accepted. I guess I feel kind of passionate about it because my one niece has severe speech issues that no one seemed to notice because they thought it was so "cute". Now she is paying the price in school and is faced with years of speech therapy and her parents STILL don't get it.
And my DH's family is Polish but they don't use the Polish names (which I could live with)