Well IR modulation is fairly straightforward - you can design a simple code (lookup IR remote codes but that is probably overkill ), use ATMEGA timer registers to create the carrier signal at say 38khz and modulate signal with your program - ie signal on and off pattern of your 38khz carrier - and connect it through say a transistor switch to your signal circuitry and have something like TSOP1738 at the receiving end.
ATMEGA PWM intro - http://arduino.cc/en/Tutorial/SecretsOfArduinoPWM
Google for IR Remote code too.
However, i see that you mention you are using IR LED not some laser - with LED, won't you lose directionlaity?