Anything but DIana (if it's a girl!) for the first name, it could be included in the whole name but just not Princess/Queen Diana. IMO that would be a helluva burden for her, so much to live up to and the comparisons would never end (they won't any way but can you imagine it if she's actually called after Diana?!)
Not a good idea to me but I wouldn't be surprised if it's what William wants but if so he's not really thinking of the impact on his child
Then again the child could embrace it and love being called after her but I wouldn't take the risk.