(An answer from an undergraduate in the U.S.; cultural differences will probably apply)
I took a Computer Science intro class 5 years ago. I had a great professor (a TA), who preferred to be called by his first name. I was infinitely more comfortable with this lecturer, and so I had no qualms in asking office-hour-questions (less intimidation factor), and gaining valuable knowledge because of it.
You can't know how your students will interpret this type of change until you start. Students expect, and want an authority figure in their university courses. Yet, they might be more comfortable in a 'friend-like' setting, where rank, title and authority are less of an issue than what they learn. As a student, the most effective combination (for me) is the following:
- Create an open and relaxed environment as the instructor: let students call you by your first name. This creates a more open atmosphere, where rank, title and authority are less of an issue for the student than their learning perogative.
- Ensure that students respect you: clearly define expectations (usually in the syllabus), so that students are aware of what you expect
- Ensure that students do not take advantage of the 'first-name-basis'
- if your policy states that you don't accept late work, make no exception to the rule
- if your policy states that being 5 minutes late to class equates to an absence, make no exception to the rule
As long as you remain authoritative, yet lax, your students will do what students will: some will respect and adore you, some will slack and resent you. That is the way of the world.
Given the above, you have a significant advantage, in my eyes, by allowing students to address you familiarly. You allow students who feel more comfortable doing so avoid the pitfall of "this professor is so intimidating and smart that I can't go to their office hours because they'll resent me for asking basic questions and make me feel stupid", yet you remain an authority figure for those who prefer to address you as 'professor'. Of course, whether or not students are intimidated by you is partially dependent on your social behavior as a whole, and not just the title. But speaking from experience, having had professors who were very strict with their titles, the feudal-esque authoritarian role does not sit well with a lot of students, as it puts them in the 'peon' (laborer, serf, etc.) level compared to you, which in my opinion is not conducive to a learning environment.
Moreover, the argument that students will take advantage of the 'lax' state of address is completely ridiculous. You, as the professor, have absolute authority to lay out the rules in your syllabus. If students don't follow those rules, what does it matter whether they call you Joe or Professor Johnson? You can easily state, for example, that you will ignore email requests that do not fit a certain format. You have that power. What does your title have to do with it?
All in all, as a student, I would prefer if professors were more lax on the title aspect of their career, and focused on the academic aspect. As long as they ensure that guidelines (laid out in the syllabus) are followed, state of address/title has little to do with it the pedagogy.
(An answer from an undergraduate in the U.S.; cultural differences will probably apply)