Smart drivers learn as much as they can about the strengths and weaknesses of their competition in order to exploit them as efficiently as possible. Therefore, I always race with names on.
There are some drivers online who I know I can trust - they're fast and have good car control. They know how to brake. They know how to place their car and leave sufficient space when battling. I know I can send one down the inside and know he'll see me and give me space.
Other guys are much more erratic, so when I come up behind them I have to give them a much wider berth. I make sure they don't brake in the middle of a straight, or half-spin right into my path, or fail to acknowledge the presence of my car alongside and crash right into me. If I attempt an overtake on them, I have to be very assertive and confident. Pull completely alongside or ahead to make sure I'm seen. Don't feint a move and then back out mid-corner, as that will often end in contact.
Some people change skins frequently, so car color alone isn't always a reliable indicator of who's around me. Instead I just turn names on and remember as many as I can. I try to pick out little things about the cars around me. The guy ahead brakes a little early for T4, or takes an unusual line through the final corner. The car behind me seems to be lagging a little, be careful if he gets close to you. I'm constantly looking for these little things and applying them to my current situation in order to maximize it.
Being a fast driver isn't only about minimizing one's own mistakes, it's also about seeing and reacting to the moves of other drivers in order to minimize their impact on one's own race and take advantage of their errors.