One of the things that the Wellington Flickr Group did was a few of us got together and did some
street portraits in exchange for chocolate. I've seen this idea on several
websites and always thought it was interesting. Walking up to strangers and asking to take their picture is not exactly something I'm comfortable doing, but we had some very outgoing people with us who were more than willing to.
What we did was tape up a few pieces of coloured posterboard against a wall in a busy area of town and started asking people if they would let us take their picture in exchange for a piece of chocolate. We gave them a sheet of paper with how they could find their picture online and snapped away. We wound up taking pictures of about 50-ish people in an hour or so and had heaps of fun, and even told a bunch of people about flickr in the process.
So, if you're nervous about taking pictures of people and don't mind doing posed shots like this, it's actually a really fun project for a group of people and you don't come off seeming too creepy
And some people are so enthusiastic about participating that it's great!