What's happening here? The streetlights are like very quickly flickering strobe lights - they "freeze" a moving object in time by taking many quick snap-shots. If the bicycle wheel is spinning too slowly, these fast snap-shots just tell the story of a rotating bicycle wheel - not very exciting. But if the bicycle wheel is spinning at just the right speed, the tread will have rotated exactly the right amount to appear to be in exactly the same position when the next "snap-shot" is taken by the street strobe light. Notice that this doesn't need to be a full 360 rotation of the wheel: the wheel just has to spin far enough so that the tread, say, one centimeter behind has now exactly taken the place of the tread ahead at the moment the street light flickers.
These frozen "snap-shots" are really close together in time: the street light was flickering at a frequency so fast that the light just looked like it was continually shining to my eyes. So when I look down at my bicycle wheel, the series of snap-shots are put together smoothly, and my bicycle wheel appears to be still!
Here's an example of the same effect using a strobe light and a fan: http://www.youtube.com/watch?v=_3Fk5avi6kA. The key is just to match the frequency that the strobe is flashing to the angular frequency at which the fan blade is spinning, so that the fan blade is in the same location when each snap shot is taken.
