Safeware was bang on the mark with:
He has climbed to the top of his pile, you are at the bottom of yours, he deserves your respect for that.
From my perspective, it depends upon the situation:
Flt Lt Badminton-Racket: Mr Spleenripper, do you think it would be worth re-training some of the linies on procedure 'X'?
WO Spleenripper: Hmmm....
will get you much further than:
Flt Lt Badminton-Racket: Bob, sort your men out!
WO Spleeripper: F*ck off 'Sir'.
For myself, I've always found it polite to call people 2 ranks above and up by their rank (i.e SAC calls Cpl and Sgt by name once introduced to them as such, but sticks with 'Cheif' and 'Flight') as long as the situation warrants it. The exception is that the Wobbly is always called Sir, no if, but, or maybe about it.
On another note, I seem to remember a new JEngO turning up to a Sqn and introducing himself:
"Hi, I'm Flt Lt Week-willed, but you can call me Simon socially". Very good that, and he spent the rest of his tour being called 'Simon socially'.