I found the solution myself. The JavaScript function needed is missing somehow in the documentation, but is visible in the runtime / debugging environment. The new code now looks like this:

function SetGridTitle(gridID,title)
{
	var grid=ISGetObject(gridID);
	var ColNo=grid.RootTable.Columns.GetNamedItem('Column_Name').Position;
	grid.RootTable.Columns[ColNo].GetElement().innerText=title;
	return true;
}

or even simpler:

function SetGridTitle(gridID,title)
{
	var grid=ISGetObject(gridID);
	grid.RootTable.Columns.GetNamedItem('Column_Name').GetElement().innerText=title;
	return true;
}

You can get the column by specifying its name in GetNamedItem method.

e.g

var grid=ISGetObject("WebGrid1");
grid.RootTable.Columns.GetNamedItem("NamedColumn");

Hope this what you are looking for.

Regards,
Handy