I haven't done much street photography, in spite of being very interested in the genre. I've tried the telephoto lens thing and I don't like it, it makes me feel like a paparazzi which I definitely am not.
The best shots I have made in this style were done with either a Nikon FG and a 50mm f/1.8 Series E or 35mm f/2.8, a Yashica 635 TLR, or an Olympus Stylus Epic. Nobody seemed to find these cameras objectionable. I've even had a few people look right at me and smile! Especially with the Olympus, nobody paid any attention to that camera. I preset my exposure and focus, and just take the photo.
Sometimes I ask permission, and if I don't get it I just keep walking. The only time I had a problem on the street I WASN'T actually taking the "gentleman's" picture.