The one I played was:

Down by the banks with the hanky-panky
Where the bullfrog jumps from bank to banky
With a hip, hop, rattle and a pop,
With a hip, hop, rattle and a pop,
A, E, I, O, U are out!

We did the palm-slapping in a circle thing, and if you were the one hit on the word 'out' you went out. Of course, if you could dodge it, the person who was supposed to hit you goes out.