It depends on the culture of the university you're at - but if in doubt how to address anyone, you can always ask.
At universities in Australia and New Zealand, an informal "Hello" is probably fine. I know of a few departments where formal titles aren't even on the office doors - just names.
However - if you're feeling awkward because you're unsure whether to be more (or less) formal - why not just ask? Just smile and say something like "I'm actually not sure how to address you because I'm also a student - what would you prefer?".
Most academics I've met prefer informal greetings, and if they've directly given you permission to address them informally, then you don't need to feel awkward about it. Similarly, if they prefer the title, then just treat it as if it were their name, and carry on as usual.
On the other hand, addressing them by their first name can appear too casual along with not attributing a level of respect to them.
I personally believe that conveying the appropriate level of respect is unrelated to using their title. For example, it's possible to use the right title and still be disrespectful while still using a title. I think it is more important to show respect by being polite, listening and valuing what they say, not to wasting their time, and so on.