Kevin,
I'm a bit confused as you have a "PRO-196" in the title of your post, but then ask about a PRO-163. As far as I know there isn't a PRO-196. The PRO-163 will not decode digital transmissions. The constant rushing static noise you are hearing is an analog receiver (PRO-163) receiving and not decoding the digital transmission of the LAPD. The LAPD has a conventional (non-trunked) digital radio system.
A digital scanner should not be confused with "digital squelch" or DCS. DCS is a digital sub audible signal that allows transmission to have a "code" attached to it that can be programmed into a receiver in a manner that it will only receive a signal with the proper "code." Digital radio signals are entirely different, as they convert sounds into binary (all 0's and 1's) just like your computer.
The PRO-197 or PRO-106 scanners will decode digital transmission and $400 is not a bad price for a digital receiver. There is a trend toward digital in the radio communications field. There is also going to be a move toward "narrowbanding" which means some of the channel spacing in the PRO-163 may not be compatible with future changes. The Radio Shack digital scanners (made by a company named "GRE") are capable of having their "firmware" updated online. This allows the functioning of the radio to be changed if changes are made in radio communications technology, such as different channel spacing and changes in frequency use. The latter is important as the conversion to digital TV moves on, which may cause new frequencies to be available.
If you purchased you PRO-163 at a Radio Shack and mentioned that you wanted to listen to the LAPD and their response was that this radio would work for the LAPD, they were wrong. Radio Shack sales people are infamous for being misinformed. If you purchased the scanner recently I would recommend you take it back and get a refund. You can either tell them you were misinformed by store personnel or you can just say this is not the scanner you wanted because it will not receive the LAPD, in effect saying you are not satisfied with the radio. I would take the $190 or so that you will be refunded and cough up the extra money for a PRO-197 or 106 and start listening to the LAPD.