More than once I've had people ask for help because the concept and naming of hooks in Drupal both frightens and confuses them. FRIGHTENS and CONFUSES. Sadly, this is a very common occurrence.
In order to address this problem, the SAC (Sensible API Calls) Initiative has been formed. Our first task has been to clarify and simplify alter hooks throughout Drupal. We've opened issue #1510984 on drupal.og and posted an initial patch, which addresses how the alter API is called.
Simply put, all hook_THING_alter() implementations have been renamed to hook_mess_with_THING() so as to more accurately reflect what happens when these functions are used. Accordingly, drupal_alter() has also been reimplemented as mess_with_drupal().
Updating your contrib modules to work with these updated hooks is trivial and new API documentation is inlcuded in the path. Thus, the SAC team are confident these changes will be available for production as of Drupal 7.13.
Please add your thoughts and additional patches to issue #1510984.