At least in Spain, generally flea markets are mostly integrated by gipsy people selling all the goods you describe in the context. It is widely known gipsy people are very lively and a traveller people. Not every seller is gipsy, of course.
Here enclose some links:

http://www.algarve-portal.com/en/shopping/markets/
http://www.vonscheven.net/AAAEnglishGreeceIraklion.asp#Zigeu...
http://www.alicante-live.com/ocio/alteamarket.htm


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Note added at 34 mins (2007-11-02 10:43:30 GMT)
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Of course, you will see more results in search engines for flea market and street market (a big difference in results).
However, I believe that, as being the context talking about Spain probably would better fit "gipsy", for the reasons I say above.

Also, I do not know what are the habits of vendors both in "flea markets" (term likely to be more used in the USA) and "street markets" (for the UK). I do not know whether vendors on these markets are mobile.
Mobility in "mercadillos" is that "puestos ambulantes" refer to vendors that one day sell in the "market" in Barcelona, and next day go selling to next city. Vendors in these markets sell with a fixed weekly schedule.
Let's put an example with UK names...:
A vendor of pottery can be at Uxbridge market every monday, and go sell to Northwood every Tuesday, go to Ruislip every Wednesday and so on...
that is what usually do vendors in Spanish street or flea markets.

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Note added at 36 mins (2007-11-02 10:45:08 GMT)
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So then, it is not the market itself what is mobile or itinerant, but the vendors stands.

A sugestion

I believe that your initial translation is the most correct one, the fact that it is ambulante does not change its meaning. Flea markets in spain are both mobile and fixed depending on the venue. Some cities would have a fixed venue for each week's mercadillos. Also if they are mobile, which means that after the day is finish who ever is working the stand will pack up and move and come back next week.

street market and gipsy market are synonims of flea market.
Although the words street and gipsy give it a conotation that cannot be applied in general but only to very special situations. Gipsy might even be taken the wrong way.