In 1963, Porsche decided that all models afterwerd would be 9##. The first car from this was to be 901. Because of Peugeot, French law said that any car sold in France with #0# had to be a Peugeot. For example, 205, 306, 407.
Porsche didn't want the hassle of dealing with law suits so they moved 901 to 911.
This is from my head and not from wiki or anything else.
Do you like the old Fuchs?
I figured...you're smart and I couldn't find it on Wikipedia anyway.
I've read the story about Peugeot before. Didn't realize it was as simple as that...and the Porsche 907 sort of had me confused in that regard. I guess the naming controversy didn't arise because that was a race car?
904, 906, 907, 908, 909 were all considered prototypes. Only the 917 project found a loophole in the rules and was meant to classify a car as a production sportscar.
Really though, i doubt the Peugeot cared about the names of race cars. In 1963, the 911 was only a street car.