Hrmm, I'm American. To me, there's a significant difference between the two.
"In the street" means literally that you are "in the middle of the street, standing on it, and waiting for a passing car to hit you.", while "on the street" can be used to describe buildings which face the street. i.e. "The factory was on Jackson Street." or a pedestrian who is walking down the street, but is on the sidewalk, not in the middle of the road.
I somewhat disagree--I think one rides a bicycle in the street, but on the pavement. Which is interesting, because one rides a bicycle on the sidewalk, not in the sidewalk. And, even worse, one drives a car on Main Street. Why do I think a bicycle uses in and a car on? No idea, it's just the way I've always said it!
Try changing 'street' to 'road' and 'highway'. For me, though the vehicle may remain the same, whether bicycle or go-kart or roller-skates, the prepositions sometimes change. Curious. It seems to be more about sound and cadence than grammar.
I'd also heard/read the comment that one was American and the other British. I don't remember which was which.
I've found some set expressions in my dictionary with "on/in the street." According to it, you can say:
1)"The man/woman in the street," but also "the man/woman on the street" (the average person, who represents the general opinion about things)
2) "The streets" also "the street," "young people living on the streets" (the busy public parts of a city where there is a lot of activity, excitement, and crime, or where people without homes live)
3) "a car parked on the other side of the street"
4) "be (living) on easy street" (to be in a situation in which you have plenty of money)
Hm, now the obligatory question for me is, if you heard a nonnative speaker saying "on the street" where you would have said "in" and vice versa (apart from the cases #2 and 4), would you consider it a big mistake or wouldn't you even notice it if someone didn't point it out?
The fourth is fine. "On" is the best choice for the sentence.
He doesn't live "at" Oxford Street, he could live "in" Oxford Street, but that can be misinterpreted to mean a down-and-out who lives in a cardboard box in a hidden-away corner.
According to what I have been taught AmE and BrE differ in this respect. AmE would take on while BrE would take in, and thus AmE He lives on Oxford Street and BrE He lives in Oxford Street. However, if you specify the address, you indeed use at.
I think the choice between in and on (in 3&4) depends on how big the street happens to be.
Oxford Street is huge. If anyone lives there, they live on Oxford Street.
Chadwick Street is short. People who live there live in Chadwick Street.
Previous threads have discussed this strange subject:
I thought everyone knew that the Blairs and the Browns have swapped - the Blairs actually live at 11 Downing Street as it was more commodious for their larger (by previous Prime Ministerial standards) family.
Is this some strange sort of BE thing? I would never say anyone lived IN any street, no matter how short or small it was.
When I think of someone living IN "11th street" (as an example), I imagine tiny sidewalk people who live in the cracks of the sidewalk, or something like that. The only time I can think of using IN + STREET is:
I live in the street
Which would mean something on the lines of beeing homeless. However, I would use ON there as well if I felt like it.
From a purely AE standpoint, "at" is used for a specific, defined place, "on" is used before a street name with no specific address, and "in" is used whenever there is the sense of "within" or "inside of." For example:
He lives at 34 Oxford Street.
He lives on Oxford Street.
He lives in Palace Apartments.
Notice that if the person you are talking to already knows of Palace Apartments, then it is already defined and specific enough between the speakers, so that one may say, "He lives at Palace Apartments." (If the other person does not know of Palace Apartments, he would infer that it is a specific place and probably ask, "What is Palace Apartments?" instead of "Where is Palace Apartments?")
There are always exceptions and linguistic nuances. One could say, "John lives at that restaurant" to mean "John goes to that restaurant so often that he practically lives there"; but to say "John lives in that restaurant" would imply "John physically inhabits that restaurant."
When speaking of geographic regions, one always uses "in" since we literally mean "He lives within/inside of London" and not "He lives on top of London" or "He lives at the specific spot of London."
I'd be happy with both of them, and with "Our shop is in Adelaide Street".
The size of the street doesn't matter to me.
There used to be a difference in the understanding of what constituted a road/street/place/lane/avenue etc. but no longer. I think this might be what panjandrum is referring to.
the word on the street is... but
The graffiti painted in the street (eg on the walls along the street, on would mean literally painted on the road surface - unless that's what you meant?)
The car was parked in the street.
So, it seems we only use "on" for the the "word on the street" (although I may not have thought of an example of "on" of course).