Tricky as unless your in a well lit area focussing could be a problem as well as having a quick enough shutter speed to avoid blur (im assuming of course that you wont be carting round a tripod to take candid street shots).
My own view is that you either use a tripod and longer lens (although you tend not to get candid shots that way and if the person is moving youll still get blur) or go somewhere well lit to allow a quick enough shutter speed.
As for taking pictures of people, there hav been a few threads about this. I think the consensus is just to be confident. If you look like your doing something wrong then people will assume you are.
So, to summarise, somewhere well lit and just be confident about taking pictures. Its not illegal!!