Uglies is named after the stage that most of its main characters are in. Tally, Shay, and even David are all "uglies." (The second book is named Pretties, so maybe we'll see more pretty characters there; and the third book is named Specials, so we're guessing we get even more there. Even though they scare us. The fourth book is called Extras, and we have no idea what we're going to get in that one.)
We might also say that this book is named Uglies because Tally is struggling with her status as an ugly: at the beginning, she wants to be pretty and is tired of being ugly; then, at the end, she wants to remain ugly, but has to give herself up to be made pretty.We start the book off with the regular, negative meaning of "ugly" but by the end of the book Uglies, we learn that being an ugly is not the worst thing to be. (Our guess: being Extra is the worst.)