Some people use the term 'street artist' more broadly and also refer to people involved in busking, such as musicians who sing and/or play instruments, acrobats, jugglers, living statues, performers of street theatre, artists who use pastel crayons to copy famous paintings onto pavements, as well as artists who sell their paintings, portraits (e.g. caricatures), prints, and various crafts.
While some street artists may support themselves by selling a physical commodity like a portrait on paper or a painting upon canvas, performers may encourage payment by having pedestrians show their appreciation by giving coins, usually into a hat or a can. Regardless of the accuracy of the likeness or excellence of the work, portrait artists usually consider payment mandatory - which is why some local governments (in London, for instance) consider it street trading and therefore work requiring a license.
Street artists can be seen throughout the world. In some cities street artists will set up spontaneously wherever they like, but often run the risk of being arrested if municipal ordinances prohibit their display. However in other cities, street artists can be licensed within municipal street artist programs so they may legally sell their artwork. Frequently these municipal street artist programs will describe designated locations where licensed street artists are allowed to display, as well as regulate what they are allowed to sell in an attempt to allow only handmade items of the artist's creation and not the manufactured work of others. San Francisco, Berkeley, and Seattle are American cities that allow the regulation and legal display of street artists and their wares through municipal ordinances.
Tricks of the portrait artist include exaggerating about the shortness of the sitting, to praising the supposed beauty of prospective customers' wives or children in order to flatter, to charging apparently well-off clients extra. In their favor, many have excellent ability, and as a whole, they add atmosphere to squares and alleys. Popular areas include parts of the West End in London and Montmartre in Paris. Many portrait artists are also capable caricaturists.
In New York City, street artists have an advocacy group that has won numerous Federal lawsuits on their free speech rights. 
An example of a caricature, a popular form of street art
See also 
Media related to Street artists at Wikimedia Commons