Having lived in downtown LA for several years (in the 90's before it got cool and expensive), in both the Toy Town and Fashion District areas, I know a bit more than the average Angeleno about skidrow.
Skidrow, the homeless, and the addicts are a part of LA that not too many people see. And if they do, they generally try real hard to make sure they don't see it again. Living in the area forced me to observe and deal with the situation.
My primary observation is that most people who stay on skid row are crazy. It is hard to say much more than that, because each person is different. But everyone I ever got to know definitely had some kind of mental, emotional, medical, or addiction issue that effectively made them nuts. They were on the streets because they could not get live any other way.
The best way I found to to deal with the people on skidrow was to treat them like anyone else. I would say 'hi', 'bye', 'excuse me', 'please', and hold doors open just like I do for anyone else. After you see the same person over and over, conversations inevitably occur and you can come to know them as an individual.
I am saying all this to encourage you to watch the documentary 'Skidrow' that came out recently. Hopefully it will raise your awareness and inform your actions regarding the homeless. You can get the movie from Amazon or Netflix.
There is also a special Activist Edition of the DVD available for students and activists that want to raise a group awareness and will help get something done about this growing crisis. You can sign up to host an event at http://skidrow.bravenewtheaters