Yeah, one tenet I've always held as a translator is that there's never any excuse to "dumb down" something just because you don't think the target audience will understand it. "Fenghuang" is indeed something most Westerners wouldn't understand... but that's what Google is for! 
And even if you're talking the old days, before the internet... that's what encyclopedias are for! If you see a term you don't know in a game, you look it up! Or, in really good localizations, the game will subtly explain it to you through dialogue.
Either way, it's better to do that than to dumb it down and lose a part of the game's lore in the process.
I've seen some fan-translations that often cut out details like these -- they'll lose the fancy names for spells, for example, instead replacing them with generic terms like "cure" or "antidote" or "attack up" or something. And sure, that probably helps with gameplay... but those fancy names are part of the experience! When you get rid of them, a little piece of what makes the game special is lost too.
-Tom
To me, that just seems a bit unnecessarily strict and purist. 
To draw a parrallel -
For a Romanian title, that's set in Transsylvania, could we translate "Strigoi" as "Vampire"? I think that would be accurate enough, even if the terms do not 100% mean the same.
Also, all previous translations (of the manga, OVA and the games) seemed pretty comfortable with using "Firebird" and "Phoenix".
To me, that just seems a bit unnecessarily strict and purist.
To draw a parrallel -
For a Romanian title, that's set in Transsylvania, could we translate "Strigoi" as "Vampire"? I think that would be accurate enough, even if the terms do not 100% mean the same.
Also, all previous translations (of the manga, OVA and the games) seemed pretty comfortable with using "Firebird" and "Phoenix".
I understand what you're saying perfectly well, but as I said, "ryu" is not a specific creature, it's a simple word that encompasses all types of dragons. In contemporary usage the words 100% mean the same.
I'm not familiar with the English translations of Hi no Tori. Hou-ou is also translated as "phoenix", do you mean?
But anyway...
I think the purpose of this thread is to translate the original titles to understand their meaning. This is not a contest for the best English title to put.
Dr. Slump: no offense taken with regards to Firebird title.
Glad to hear it!
Yeah, the "hinotori" part isn't the part that we're suggesting translating as "Fenghuang" -- rather, it's the "Hoou" part in the game's extended title, "Hinotori: Hoou-hen." And given that the Japanese specifically used two different words, it doesn't make sense for the English not to do the same -- especially when, mythologically, the phoenix and fenghuang are distinctly different creatures.
To use your example, I would probably never translate strigoi as vampire. I would go with strigoi, for sure, if I were in charge of the localization. Because even though the two are similar, they are not one and the same, and to simplify the localization by using a more familiar term is to lose a little bit of the exotic flavor of the original text.
As an example of this from a game I DID translate, one of the bosses in Brandish: The Dark Revenant on PSP is "Azi Dahaka," which is a reference I sincerely doubt any English-speaker will get without looking it up -- but that was the creature's name in Japanese, as a specific reference to Persian folklore. I could've just gone with "Hydra," which is a much more familiar term in Western fantasy... but Falcom chose to reference Azi Dahaka, and I wasn't about to lose the awesomeness of that reference.
-Tom