It can be a brilliant idea or a dreadful one. There are a few things you need to consider in order to make an informed decision.
First of all, whether you use a friend or hire a stranger you absolutely must make sure you have a good contract in place. Yes, even if your friends are not charging you for their services. I recommend "paying" at least $1.00 so there is a commercial transaction of record. You are blurring boundaries and altering the nature of your relationship for a duration of time, so you need to set clear guidelines concerning expectations. Theirs and yours! No, you may not need to do this for your friend who volunteers to make place cards for you, but you certainly want one for the friend tending bar or providing the bouquets, corsages, and boutonnieres.
You should consider whether your friend has the necessary experience to meet or exceed your expectations. If your friend is in the wedding industry, it may make sense to take advantage of their services. I suggest treating the potential for booking their services as you would their competitors. Compare them to other options and see if you feel they would be a good fit. Don't presume to ask for a discount, but by all means, graciously accept it if they offer. Do not be disappointed if they don't however. This is their livelihood and that should be respected.
If your friend is an amateur or does similar skills in an unrelated industry, you may want to take some more time making your decision. Will the savings be worth what you are likely to sacrifice in quality? If it's an aspect of your wedding that is a lower priority for you, it may be fine. If it's the one thing you absolutely want to be spot on perfect, opt for a professional.
There are a few categories of wedding professional I am inclined to wave people off from using friends almost entirely. Surprisingly, the officiant isn't one of those wedding professionals. I have addressed how to choose the right amateur as your officiant and can easily see why a friend could do this job well enough....under the right circumstances.
You want to take exceptional care when deciding whether or not to use a friend for your photographer, videographer, DJ, and caterer. For one thing, this is a wedding professional who is working hard on the day of the wedding for many hours. Your friend will not be able to be both a guest and work for you at the same time. If this is someone you would ordinarily invite to your wedding without giving it a second thought...don't use them as a friendor. If it is more of an acquaintance who might or might not be high on the guest list...than it might be okay. A friend who is a florist can easily work on your arrangements before the event, deliver them, and then relax and enjoy the festivities. Your DJ friend does not have that option.
Photographers, videographers, DJs (musicians), and caterers have varying degrees of talent and artistry. You should select friends or professionals who match your tastes and produce work you admire and fits your style. If friends offer their services to you at reduced prices or even better, free, but you are not enamored of their portfolio or work...it is no bargain. You may feel a little squeamish about turning down a friend's offer to work your wedding, but you have to get over that and simply say, "thanks, but no thanks."
Friendors are perfectly acceptable when everyone understands their respective roles and gladly takes on the responsibilities and obligations that go along with it. If not, there is a disaster waiting to happen. I once stayed for an hour after a ceremony and took portraits of the wedding party and family on my camera since the bride's friend who had agreed to photograph their wedding failed to show. Well, actually he did pull up right as I was getting in my car to drive home. He was a friendor who volunteered as their photographer for free and still was not worth what he was getting paid.
Penny wise pound foolish springs to mind when it comes to friendors. Choose wisely!
Friendor: (n.) any friend, acquaintance, great-uncle, co-worker's boyfriend, cousin's girlfriend, etc. who offers or agrees to provide products and services at reduced cost or free that you would normally contract with a professional to do.