I would stay in *drumroll* a hotel! It's a very big town, but I wouldn't get something too close to the heart of the city, or Hollywood either. It's very close to new years, and gets REALLY crazy. So I'd accept a rental car and make the drive to wherever your destination is.. cause until after new years, most hotels in the downtown area are going to be booked absolutely solid.
Haha, Primus is my favorite band and they played at the Wiltern on the 28th I think.
Anyway, have fun! Even though I personally think LA is pretty scummy and an overall shithole, I used to absolutely love travelling down to Orange County and hitting the beaches. If you can, I'd suggest checking out Santa Monica, Newport, Santa Barbara...I could go on... *sigh* I miss living in CA.