Gerry Anderson has said that it was simply short for 'fabulous', but of course, in ye olde days of short wave rebro, it also meant 'Fully Acknowledged Broadcast'. I suppose everyone knows that they were named after 5 of the original Mercury 7 (Virgil 'Gus' Grissom, Gordo Cooper, John Glenn, Scott Carpenter and Alan Shepherd).
I had the entire Captain Scarlet lot. I always felt a little sorry for Captain Blue.. no secondary duties, never had a good tour, not indestructable.. no wonder Col White only ever trusted Scarlet.