There are lots of variants, but here is the basic version:
M R Ducks
M R Not
O S A R (sometimes: OSAR2)
C M Wangs?
L I B
M R Ducks
How to read:
'em are ducks
'em are not!
Oh, yes they are (too), see 'em wangs? (wings)
Well I’ll be, 'em are ducks.
My question: why the heck is WANGS so darned funny?
Sincerely
NCUN
Because it’s a slang word for male genitalia?
I don’t know but my uncle tells the old joke about two rednecks who see a dog licking himself. The first guy says, “Man, wish I could do that!” and the other replies, “That dawg’d byyyyychooo…” (that dog would bite you). It’s only hilarious because of the shocked hillbilly twang my uncle puts on “byyyychooo”.
When reading the thread title (and the forum it is posted in) I assumed that CM Wangs was some restaurant chain I was unfamiliar with with a slightly suggestive name (Like Fudruckers.)
Seymour Wangs?
We have the stupidly-named PF Changs and Ruth’s Chris (yes, the “wrong” word is possessivized) here in Phoenix, so CM Wangs would fit right in.
The version I learned was…
A B C D Puppies
L M N O Puppies
O S D R Puppies
C M P N
Hey B, See the Puppies?
Hell, them ain’t no Puppies
Oh yes they are Puppies… See them peeing
They are supposed to be drunks to explain the slurring. Helps if you say it fairly quickly.
My wife’s grandmother had a sign in her kitchen with a Latin version of one of those:
Osibili, si ergo
Fortibsus in ero
Nobili, dei es trux
Sewus inem
Cowsen dux
Translated:
Oh, see Billy, see her go
Forty buses in a row
No, Billy, they is trucks
See what’s in them? Cows and ducks
She was quite the cutup, apart from the sign. Funny lady
I LOVE it!
My parents used to quote that exact faux-Latin poem to me when I was a kid. I think I remember them saying that they’d heard it on Jack Paar. 
Wow this is a peak 1996 internet joke, back when we were using Gopher.
The one I know is:
M R mice
M R Not
S A R (I don’t remember an O)
C M E D B D feet
L I B
M R mice
I’ve not been able to locate an online version of something I saw in a magazine (or other printed matter) years ago. There were cartoons to accompany the little word-play things.
This particular one had a picture of a pigmy with bow and arrow in hand standing near a pile of bones. The cartoon bubble over his head said:
V F E 10 Z L F N
Did anyone else see this one? If so, what publication was it in?
As I recall, there were some other clever pictures to help decipher some of the other whatever name this technique is called! Is it a rebus?
There’s a good chance that Games Magazine may have had these things in it. That was a fun periodical!
Off-topic: Does anybody else remember “droodles”?
The classic version, which goes back at least to the mid 60s and is IMHO much better because the repetition makes it more confusing, is this:
MR pigs.
MR not pigs.
OS MR pigs.
LIB MR pigs.
Short, sweet, almost poetic.
Mairzy doats
I have to tell my favorite bilingual joke, which depends on saying letters as words.
A Mexican guy who speaks no English but wants to buy socks goes into a clothing store.
He says to the clerk, “Quiero calcetines.” (“I want socks.”)
The clerk says “I don’t understand Spanish. Do you want to buy pants?”
The Mexican says, “No quiero pantalones. Quiero calcetines.”
The clerk then offers him shirts. He replies, “No quiero camisetas. Quiero calcetines.”
The clerk keeps offering him different items, only to have them rejected.
Finally he shows him socks. The Mexican says, “Eso si que es!” (“Yes, that’s it!”), pronounced ess-oh-see-kay-ess (SOCKS).
The clerk says in exasperation, “If you could spell it, why didn’t you tell me that when you came in!”
The author of Shrek, William Steig, has a whole book of these, called CDB? (and, of course, its sequel, CDC?) They’re all cartoons captured with letters. For example, a weeping boy is captioned, “N-R-E S N T-S.”