Google is changing things as we write.

Today, 23 January 2006, we see,
** Persian Gulf at high altitudes with Water Bodies (Major) turned ON
** Arabian Gulf at low altitudes with Water Bodies (Minor) turned ON

Nearby countries have invididual preferences (often based on current political events) as to what they will call an international body of water. The primary Google Earth language is English, so it's probably well that they've used a method to show both names.

The earlier Gulf of Bahrein has become Gulf of Bahrayn.
(English is Bahrain, French is Bahren)

The country name (with Borders ON) shows as Bahrain.