I have a piece of the hl1606 strip, and while the pixels are individually addressable, you cannot individually control the brightness of the chips. I played with some hacks to use the fade line to adjust it, but there really is no good way to do anything better than 7 color mode (or a 15 color mode with a bit of trickery with the strobe line). I was planning to build a simple DMX-hl1606 protocol converter, but it wasn't worth it to me running in 7 color mode.

I ordered and received 20M of the same LPD8806 strips for 117 bucks per spool. I hooked it up exactly as the tutorial describes, using an atx ps.and everything ran great by so far.