Gymnastics without the gym.

It takes so long to explain to people the bus thing, I actually find it easier to explain the history of parkour (parcours du combatant)* and lead on from there into the movements, and then onto the mindset & the theory behind it. If it turns people off - then parkours not for them, no need to make it out to be something that its not or gloss over crucial elements in order to 'sell' it to them - otherwise people will be disappointed, confused and quite possibly a little angry later on if you suddenly turn around and change what you originally said to them.
If they're interested and you're outside, mabe look around you and pont out a run you'd take, or better yet, go ahead and do the run.
Sometimes, it's also useful to explain it as more akin to running rather than gymnastics - for a start, it communicates its nature of simple, effective movements, it gets people to think of a course or route rather than a series of tricks, and it makes people forget about the wow factor and focus on the practical aspect.
"Taking an inefficient route, and travelling along it efficiently"**is (I think) about as succinct as one can get when trying to
summarise parkour. Maybe kick off with this, then lead into parcours du combatantt and then on from there, as I stated above.
Depending on how interested they are, maybe mention something about the eventual aim of parkour - flow (kids, its a noun, not an adjective

).
It's a pick and mix really, it's up to you, as long as you don't mis-represent things (hardcore roof flipping, etc) then I don't think there's a 'correct' way, as people's minds work differntly and so they will latch on to different things. As ever, its much more useful to demonstrate than explain though...
Maybe this thread leads on to the question, once you've explained what parkour is to them, and they want to do it, how do you get them started? How do you explain vaults to them, and what techniques do you have if they're having trouble nailing something?
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*French for 'obstacle course', although the term is only useful as a visual metaphor. If you use 'urban obstacle coursing' interchangibly with parkour, I will punch you in the ovaries

**Quoted from Dave, Blackpool, UK (find him on parkour.net)