Who am I being ruder to now?

One of the biggest, most exciting shake-ups from my childhood was when our parents finally gave in and let us get call-waiting on our phone. We were definitely the last people on our block to spare people from hearing that annoying—and now virtually extinct—sound of the busy signal. But one of the rules my mother insisted we follow with this newfangled technology was that whomever we were talking to first was the priority conversation, and anyone who beeped in had to be told, "I'm sorry, I'm on the other line, I'll have to call you back."  

Cut to: A few decades, and a technological revolution later…

The other day, I was walking down the street, holding my cell phone to my ear when I ran into one of my husband's friends. These days, most people see someone on a cell phone and assume it's not a good time to stop and chat. They might wave and mouth, "Talk to you another time!," and just keep walking. But not this guy. He stopped and waited for me finish up my call. I put up my finger and said, "Sorry, I'm just about to leave a message…," but then things got even more complicated when the person I was calling actually picked up. I realized I was stuck in the now-common but still-perplexing etiquette quandary called, "Who am I being ruder to now?" 

According to my mother's rule, the person on the phone should get priority since I had made the call first. But Lord knows my mother never had a cell phone-meets-live-person-interruptus scenario in mind when she coined that dictate. Now I'm guessing that my mother would say that the person in front of you takes priority, and that you should tell the person you're on the phone with that you'll have to call them back. But that feels rude, too! 

So I ask you: What's the best solution when you run into someone while you're on your cell phone? And what's the protocol when you run into someone else who's on their phone? Do you stop and wait, or just keep moving along?