Laugh spawned in the "Community" section of the original AOL series. It is a sarcastic way of shrugging off a ill attempt at a flame, and/or libel.
Something to the extent of "
Whatever".
It is mostly used by the lesser l33t of the internet community to make up for the
fact they are what they are. (Side note) Most counter-strike players use it.
Bill: DUDE OMFGWTFBBQ YOUR A IDIOIT
Bill: YOU NEED TO GO KILL YOURSELF
WTF!
Bill: IF YOU DIDNT USE AIMBOT, ID WTFPWN
Bob: laff.