It basically comes down to everyone understanding the deal - the crew is there to ensure safety on board and to provide the airline's paying customers with a positive experience to reinforce brand loyalty; the staff traveller is there because it's a work-related privilege (or because they're on business or duty). Period
The staff traveller acts discreetly and dresses appropriately to avoid antagonising other passengers and doesn't make extra work for the crew (and is clued up enough to decline a meal if the flight is undercatered or a cosmetic kit if that's company policy.)
The crew acts as if the staff traveller is a normal passenger.
That's the theory, anyway.
Mostly it works, but you experience some absolute shockers (I'm somewhere up in the 2 million mile bracket by now, most of it on business travel...)
Good stuff like the CSD in First saying "Well, from your status, I guess you fly about as often as I do, so I don't need to give you the lowdown on the service" and bad stuff like being absolutely ignored by the CSD in First (different one..) to the extent that my neighbour was about to write a letter of complaint to the company.
Most of us are clued up about what the deal is, I reckon - it's just the idiot fringe of 1% that b***** it up for everyone