I know some good exercises to remember names, and it's usually not a problem, but when it happens, how should I recover. I usually get embarrassed and apologize. There's really no excuse.

Any funny things I could say, or do I just take the hit to the friendship and move on?

I'm drawing a blank.

Edit: If it was a chick I wouldn't care. In fact occasional name slips could imply abundance and low investment, but in a group setting or with a new buddy that I respect, what would you do?

I always give people slack because I used to NEVER get names right. I think my buddy felt pretty disrespected.