What is the ruling on initiating the greeting of peace (Salaam) to a non-believer, and is a Muslim sinful if he does not greet him with it but instead says "As-Salam," intending it as one of the beautiful names of Allah?

One does not sin by greeting someone whose disbelief has not been ascertained, especially if they are in a Muslim country, because the default assumption is that anyone found in a Muslim country, from whom nothing contrary to Islam has appeared, is considered a Muslim.