I've made a couple of modifications: the laser is now independent from the Arduino so that it can be placed anywhere in the room and I've changed the LED to a buzzer.
LASERS ARE DANGEROUS AND CAN DAMAGE THE EYES. IF CHILDREN ARE USING THIS INSTRUCTABLE ENSURE THEY ARE SUPERVISED BY A RESPONSIBLE ADULT AT ALL TIMES.
Step 1: Parts
Laser emiter, 3v battery and on/off switch OR Laser pointer and electrical tape
Photocell (a big one because it makes an easier target)
2 10k resistors
Battery to power the arduino with a jack
Various short jumpers
Wet sunday afternoon