I notice that many of my fellow Jewish friends prefer to say "Hashem".
I understand that it is sin to say G-d's name in vain, but what about in a sacred way of awe and worship?
"I understand that it is sin to say G-d's name in vain but what about in a sacred way of awe and worship?"
Technically, that is ok, but it must be complete. For example: MB 6:3 writes about half way through (from Sefer Chasidim), if a person is telling over a kindness that Hashem did for him, and he starts with Hashem's name, and he wants to finish telling over what Hashem did for him, it is forbbiden to be mafsik him with words, [because] maybe from this he will not finish his words, and we [will] find that he mentioned the name of Hashem for naught.
It is most likely good practice not to come so close though, as the line can be pretty thin, and saying G-d name in vain is considered quite severe.