Use it as a tiny linux server / media streamer, using http://playstation2-linux.com/ and an external usb hard disk. Might need a bit of work though, so I wouldn't recommend it if you dont know much about linux.
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What did you want me to read on that page? Could you please read that again and maybe write a summary on how to do that?
Ah sorry, I should have read the websites own FAQ http://playstation2-linux.com/faq.php#70kseries as apparently it doesnt work with slim ps2s. Sorry for wasting your time ;)
smashing stuff with hammers always works for me. If you want to keep the PS2 you should listen to ve2vfd though.
I have always liked smashing things with hammers. If i can't fix it successfully i will smash it, take a video, and show it to you.
You could probably fix it with a new laser module for around $10 from places like dealextreme.com or ebay.
What if i took it apart yesterday and found out the cooling fan doesn't work either? (found out the laser was burned out from some guy i don't know that works at gamestop (or one of those places like that)). That answer was a good answer though (stupid inspector guy said it would cost $1000 to fix).