Looks like with the XREF command, there are some differences between the dialog box version and the command line version.
The Dialog box version of the XREF command gives you the option when "Bind"ing, to Bind or Insert... Insert is the one that doesn't give you crappy layer names...
This is definitely something to take up with AutoDesk, I have no control over that... unless there is a trick or a system variable that we are missing.
I'm not sure about this, but I think there is a system variable named BINDTYPE that if set to 1 will emulate insert-like behavior with regard to layer names & such. Try using the following line with parentheses and quotes as the first line of your script: (setvar "bindtype" 1)