Using ISNULL In WHERE Clauses

I've seen lots of entries recommending the use of ISNULL in SQL WHERE clauses, e.g. in a search sproc where users can enter some or all parameters to search a table. Previously I would have used something like:
SELECT * FROM MyTable
WHERE (FName = @fname OR @fname IS NULL) AND
(MName = @mname OR @mname IS NULL) AND
(LName = @lname OR @lname IS NULL)

So using the neat ISNULL syntax it could be updated to:
SELECT * FROM MyTable
WHERE (FName = ISNULL(@fname, FName)) AND
(MName = ISNULL(@mname, MName)) AND
(LName = ISNULL(@lname, LName))

Having played around with this I stumbled upon a problem. If one of the fields, e.g. MName, is NULL then that clause will return false since MName = NULL isn't true and you have to use MName IS NULL. Did I miss all the caveats with using ISNULL in this way on fields that can contain NULL or have I missed something else?