And I've seen this sort of thing done with the Sharp IR distance sensor -- in fact, there was one at DorkSnow (Dorkbot London weekend event in Limehouse), using just the Sharp IR sensor and no laser.
I think the Sharp IRs are too expensive. I think I will go for a PING ultrasonic sensor, I know this is working with the Arduino. The thing is I will have to but a small lazer pointer which also could use the Arduinos power..