If you want to change the actual names of the links, I did this by editing the language .pot file
But I’m not sure if that is the recommended method. I wanted to change My Blogs to My Sites:
For 1.2.9, translate the po file from buddypress/bp-languages directory.
Save the translation as buddypress-en_US.mo [if your local is en_US) else buddypress-your_Locals.mo in the bp-languages directory and you will be done.