Been there on a couple of occasions years ago so I am not really familiar with the layout but we have friends that were there for a few years (husband's job relocation) and they were living somewhere overlooking L.A. (Thousand Oaks maybe?) But during the Rodney King riots, though they were relatively far-removed from the action, he would come home to his nice house overlooking the city and see the fires burning and smoke rising in the distance. He said it was pretty surreal.
If they were overlooking LA, it would almost certainly be Hollywood Hills or some of the surrounding areas, which are some of the best (and most expensive) parts of the city.
If your friends are still living in LA, their house is either at the US$1 million level or very close to it.
D