Actually, there are other ways to do it. The expensive but easy way would be to use Walthers Street System's plastic pieces for in-street track: you just glue these in place around the track (Code 100 or 83) and the put styrene or plaster or cardboard around them.
The less-expensive but more work-intensive way is detailed at length in Kalmbach's BUILDING CITY SCENERY FOR YOUR MODEL RAILROAD. The Reader's Digest version of that technique is as follows:
Before laying streets, paint your track (sides of rails and ties) a dark brown or grimy black color. This makes them less visible when covered with street surface.
Buy 1/8" foamcore board, and lay it around your track, cutting it to fit around curves, switches etcetera. Glue it down with Liquid Nails or white glue.
Using either sheets of thin cardstock or large sheets of .020" styrene (much cheaper if purchased in big sheets from an industrial plastics warehouse), cut out "street" sections around the outer edges of the tracks. Test-fit each piece and file where necessary so the joints are snug with the track. When they fit nicely, paint them with a primer color (gray or black) and glue into place with Liquid Nails.
If the plastic pops over the rails, nail it down with track nails. Cover these nails and any joints with drywall compound.
Using the sheet styrene, cut lengths to fit in between rails, leaving adequate space for wheel flanges. Use pieces of 1/16" thick stripwood to support the styrene. File and cut the pieces to fit and glue into place with Goo or other glue of your choice.
Paint the styrene (and cardstock if you used it) a suitable street color: Grimy Black is good for asphalt streets, Aged Concrete for concrete streets.
I'll post some photos of my latest adventure, albeit incomplete, in street track...as you can see, I haven't done the in-the-middle trackage yet, but you can see the outside edges. It has been painted with Woodland Scenics Street System Concrete--it looks a little bright now, but I'll add some goo and grime once I get the middle section in place.