I'm trying to figure out if it would be possible to use PWM to encode an identification in a laser beam that could be identified by another arduino with a sensor. I'm thinking of Laser Tag. I would want to be able to have each Lazer "gun" to have it's own "pulse" that could be read and saved by any other sensor and could be downloaded into a computer to view "hits" by each "gun" Is this possible or am I just wasting my time dreaming?? Thanks in advance for any input!!
That is possible. You would have to experiment a little with a detector circuit to see how well it could receive the pulsing laser, what angle of reception it could handle and how discriminating it can be to detect different duty cycle signals.
TV remote controls work like this - as do most laser tag equipment. FWIW laser tag equipment is not activated by the laser. They use Infrared LED's as light sources - also modulated as you describe - to reject background IR.
I'm not sure why the IR led instead of the laser - my thoughts are that hitting the targets on the vests with a laser just proved too hard, so a wider beam was required.
Google "laser tag schematic" and you'll get a ton of information. Also wulfden.org has some king of hardware for laser tag.