Mick and Carol, you're right, obviously, that Obama's opponents emphasized the "Hussein" middle name as a way of trying to tie him (quite irrationally) to the terrorist attacks of 9-11 by playing up the name he shares with the former dictator of Iraq.    (Trying to make Americans forget that there are and have been other leaders named "Hussein" and some have been our allies. And that Saddam Hussein was neither a friend of Al Quaeda nor involved in the 9-1 attacks.)   The aim was to lead the gullible to think "Hussein" = muslim = Arab = terrorist.   
They also tried to capitalize on the similar sound of "Obama" and "Osama."

But beyond that, there was still the idea that a name like Barack Obama just plain stands out like a sore thumb amid all the other Anglo-European sounding names of our other Presidents.   Even if we'd never invaded Iraq to depose a guy named Hussein and even if a Muslim guy named Osama hadn't been behind a major terrorist attack on the US, a candidate like Barack Hussein Obama would probaby have had an easier time getting elected if his name had been something like Jonathan Williams or Edward Stevens.