As indicated by the title 25 Nov 06 - 01:52 Guest gave, the Little Sally Walker Walking Down The Street rhyme appears to be a contemporary version of "Little Sally Walker"

A very similar version of this rhyme was posted by LNL on 01 Mar 04 on Mudcat's thread ofChildren's Street Songs thread.cfm?threadid=4300#1114943

Little Sally Walker
walking down the street.
She didn't know what to do
So she jumped in front of me and said:
'Hey, girl, shake that thing,
shake that thing like it ain't no thing.
Come on, girl, shake that thing
shake that thing like it ain't no thing."

LNL introduced this rhyme with this comment: "I was a counselor at a camp about three years ago, and the campers (good-natured high school students) played a surprising amount of games during break time. Not surprisingly, they weren't all innocent little rhymes. For example, Little Sally Walker has been reincarnated! She's now a circle game, with the chant."

-snip-

FWIW, in 2000 or so, I observed African American girls about 7 -9 years old in Pittsburgh, PA doing a version of this rhyme. The rhyme was almost the same as LNL's version and Guest's first verse except that the line was "she stood in front of me" . Also, the verse ended with "Ooh, girl do your thing, do your thing stop!"/"Ooh girl do your thing, do your thing-stop!". The girls stood in a circle with one girl {Little Sally} standing in the middle of the circle.
The girls forming the circle recited the rhyme while they alternated stomping their feet to a stomp stomp clap stomp stomp clap beat and clapping [their own] hands to that beat.

"Little Sally" did not sing but 'strutted' around the inside of the circle. On the lines "ooh girl, do your thing", Sally did some kind of contemporary dance step. Similar to the "show me your motion" children's games, all the girls forming the circle did the same motion as Sally. On the word "stop", everyone "freezes" {abruptly stops moving}. At the end of that verse, the girl who Sally stood in front of became the new Sally Walker and the game started from the beginning.