I have the K10 and three pancake lenses, and most often use the 40mm for street shooting. At 40mm, it's effectively just a hair longer than a 50 on a film camera, and I like that, because I can stand back a bit more. I really think that the most obtrusive thing about most cameras, for street shooting, is big glass. So even with a small camera, if you buy a big zoom, you're going to be noticable, and you're going to look like a PHOTOGRAPHER.
I also shoot an M8, and the K10 with a 40mm actually feels a bit smaller than the Leica with a 50 lux, though, depending on how you look at it, I suppose, it's actually a bit bigger. But not much. I really like Leicas -- but if a K10 owner were to make the argument that his camera, with a pancake, is as good or better than an M8 as a street shooter...it'd be a tough call. (The built-in anti-shake givs you another stop or, some say, two stops, which means those fast pancakes are pushing the Noctilux for speed, while holding a bit more depth of field.) You can also put two pancakes in your jacket pocket while mounting the third, and go without a bag...
JC