When someone laughs in a virtual media, say the Internet (IRC, Forums, MSN, AIM, etc...), they are using a virtual laughter. How can people laugh virtually? Using a series of acronyms.
Probably, the first way of virtually laughing was LOL (Laughing Out Loud). Because saying LOL all the time was a bit stupid, someone made up LMAO and ROFL. These two have opened a whole new way for virtually laughing, since lots of combinations can be made from these two, from ROFLMAO to the incredible l33t ROFLLMAONHAHAANDWSTC.
Note: Whoever says this isn't really doing the things they say, probably they aren't even laughing at all!
See also ROFFLMFAOOLTTFM, ROFFMGRUTA, ROFFGMBSAO, ROFCMAO, and even more...
Guy: I almost pooped myself, lol
Gui3: ...that's when he found out 'she' wasn't really a woman.