a reader named kevin asks me where to find "banned books" in shanghai, eswn has a nice article about underground publishing business here, if you are interested, go to read it.
i don't know if there are "banned books street" in shanghai, but if you are lucky enough, you could find some banned books in small or second-hand bookstores near large university campus, in shanghai, you should try the street near Fudan university campus, and another source is research institutes, sometimes they have a small collection of banned books for "references and academic studies", but it's much harder to get a clue how to approach them.
you are quite right that most banned books come from street carts and you won't know where or when these "bookstores" open for business. i have found them near railway stations, in food market, but mostly in streets full of pedestrians.
once i waited for a friend on the street and a middle-aged man approached me, murmuring with a very low voice "DVD? DVD? DVD?" he opened his DVD store a small wooden box and show me some porn DVDs, i didn't want that when i understood what he was pedddling, then i found my friend was coming, so i murmured to myself "he is coming" (ta lai le), surprisingly, the DVDman fled like a wild rabbit and disappeared from my eyes within one or two seconds (no exaggerating).
so if you want to buy something banned on streets, you need to be alert and quick.