What's this instrument?
 

I think it might be called a picolo. It's like a recorder, a bit longer and it sounds very medieval/court dance, (and I think it's also used in celtic music). OK, that's a very poor explanation, but anyone know what I'm talking about?

The one thing I can think of is a Tin Whistle. It fits your description, and it a very popular Irish instrument.

I think it has a more metallic sound and is shriller than the Tin Whistle.

Actually, now that I think about it, it might bear more of a similarity to a flute, (meaning it's played sideways). And I do recall it's pretty long.

A piccolo is smaller than a flute and has a higher tone.

But if what you are describing is a medieval instrument, there were a BUTTLOAD of those that are pretty much extinct today.

Edit:

I found this page that goes into pretty good detail about historical woodwinds.

http://www.aswltd.com/ww.htm

My personal favorite is the krumhorn :)

You might be describing a transverse rennaissance flute.

Where did you see/hear it? Can you link us to an example of the sound? Is it flute sounding or reed sounding?

if it's long it's not a pic. They're really tiny. Was it wood or metal? did it have holes or keys? From your description, it sounds like some sort of fife to me, but we could probably figure it out if you could give us more detail.

Guessing here, (I saw it 50m away from a busker,) long (>30cm), metal, probably keys, definitely not wood.

The style (not the sound, the instrument I'm thinking of has a sharper sound) of the music the guy was playing is like this.

A Pennywhistle is used in Celtic and old time music. Just saw where it was played sideways like a flute. If it was smaller than a flute then it was probably picolo. Where did you see it?

Maybe a fife?