The original meaning was "laugh out loud." It is commonly used on instant messageners across the world.
1.Now it has a meaning more of STFU (shut the fuck up) It is used to tell people you dont give a fuck what they are talking about, and that you wish they would shut up.
2.It is also used as a way to keep a boring conversation going on for quite a long time.
1) spacepowerxxx:today i saw your hair. it was kind of ugly.
uglyXXhair: LOL you meanie.
2) roarimfat:hey sup?
diexxxplease: nm you
diexxxplease:lol. today i got an f.
diexxxplease:lol. it sucks
roarimfat: lol. yea.
diexxxplease:my moms gonna kill me. lol.
as you can see, the conversations were pointless times 24567876.