That is one technique I also use. I call it fly-on-the-wall. I usually sit with the camera on my lap pointing to the right, the LCD pointing at me (a LCD hood helps a lot). This way I can observe and shoot what I like without attracting attention. This is particulary good for catching people naturally and have gotten my best children photos this way.
Pointing your body (energy) and camera directly at people evokes an interaction, something you or they may or may not want. I have found looking directly through a SLR at people is taken much more as aggressive than looking down, up, sideways at my angled LCD , even though the camera lens is pointed directly at them.
I have found that most people don't mind being photographed, are even flattered, but they don't like being confronted, or feel you are hindering/blocking their path/escape.
Same is true of animals ...unless you are food.