In English we have Mr, Mrs, Ms and Miss and a few others left over from former times.
In Japan it varies based on one's relationship with the other person.
Nobody is completely equal to another person in Japan, job status, age, and what you have done/will do for each other are just some of the relevant factors.
Upon meeting people will often ask questions of each other to determine where they stand in relation to the other person.
All else being equal it will often be decided by date of birth.. even a few days difference can be a deciding factor.
Here are some examples which are added to names:

San = a polite and respectful term.
Chan = used for kids, close friends or people of lower status.
Kun = used for friends of similar status
Sensei = used for teachers, doctors or anyone who is knowledgable in any field.
Kai Cho = head of a company or organisation. People who are not members of the company or organisation will often use it at ALL times even if they are socialising as friends.
Sempai = a higher status friend
Kohai = a lower status friend
Sama = A VERY important person
Kyaku sama = a customer

(Interesting note: "kami sama" is god and "kyaku sama" is a customer, but a popular Japanese saying is "kyaku sama wa kami sama desu" meaning "the customer is god".. this gives you some idea of the level of customer service in Japan!!)

Wouldn't addressing somebody as, say, "Tanaka-chan" if they are an adult or "Tanaka-kohai" to your friend seem a little disrespectful, as you are putting them below you? Maybe that is just my American point of view, but it seems to me that, if someone called me that who is not clearly in a much higher position than me, I might feel a little disrespected.

Yes, that is the American point of view

These guys consider being one month older than someone reason enough for them to be "kohai".

I was under the impression that "Senpai" and "Kohai" were only used in schools? That is, older students were to be addressed respectfully as "senpai", and the equivalent term for younger students was "kohai". Although apparantly the latter would only be used on formal occasions, rather than when addressing someone, as otherwise it would seem demeaning.

This is a pretty good video on the subject:
http://www.youtube.com/watch?v=pRsbCSoBd14&feature=PlayList&p=54734B4601A97FC7&index=18

petina wrote:

QUOTE:
This is a pretty good video on the subject:

http://www.youtube.com/watch?v=pRsbCSoBd14&feature=PlayList&p=54734B4601A97FC7&index=18

Posting links Petina??
Need I remind you of your post to me when I posted a link? Let me refresh your memory...
gbh, you really should stop posting links, sweetheart, I have seen people banned for doing it less than you have! I know you are just helping folks, and that is cool, but better to cut and past... really!
I hope you aren't banned for this infringement of the rules sweetie.