Hey

The "H" sound at the beginning of a word is a natural way to get attention, hence its presence in all kinds of greetings -- ahoy, hullo, hallo, hi, ha, yoo-hoo. Its breathy, snappy nature makes it a kind of verbal clap. All these variations go back to that; some, like "Hey," "Hi" and "Hello," just happen to have survived as standard greetings.

"What" shares the same origin, incidentally. It's all in David Crystal's "The Story of English in 100 Words."

Interesting stuff Dave, which made me decide to check with Etymology Online Dictionary. It seems "hello" is surprisingly new, dating back only to 1883, being 'an alteration of "hallo" which was itself an alteration of "holla, hollo", a shout to attract attention, which seems to go back to at least c.1400' (Etymology Online). It then lists a string of "H" words listed by Fowler along the lines of what you said. "Hello's" popularity was no doubt boosted by it being adopted as the standard telephone greeting on the suggestion of, I think, Thomas Edison. Alexander Graham Bell apparently wanted it to be "ahoy", another of the "H" family.

So the roots of "hello" also seem to lie in a call to attention, not it is not so dissimilar to "hey" in fact, although "hey" is in fact older.

http://www.etymonline.com/index.php?allowed_in_frame=0&search=hello&searchmode=none

I can remember losing a mark at school for writing 'hello' instead of 'hallo' in a dictation exercise. The teacher pronounced it as 'hello', but insisted the spelling was 'hallo'.

Just as a commentary on how it "feels" now to say "hey" instead of "hello," the first is much more casual compared to the second. I would feel slightly stilted saying "hello," to anyone that I know casually. In interviews, I would either say "Hi," "Hello," or "How are you?" as a greeting. "Hey" seems coarser, like "What's up?"

@Katie - "What's up?" is an interesting one for me,as in British English it usually has a rather different meaning - "What's the matter?" or "What's the problem?", although we are now all familiar with the American meaning from the Bud ads. There's an English language magazine here called "What's up in Warsaw", which always struck me as being rather an unfortunate title.

Secondly, I'm glad you mentioned that you use "How are you?" as a greeting, as this is another AmE / BrE difference. I've always had the impression that that is how Americans use it, for example when speaking to complete strangers (me, for example). But for us Brits it is nearly always a question demanding an answer (although we don't particularly want a detailed response) and only used with people we know. When a stranger says this to us, our reaction is "Sorry, do I know you?"