Yay! another member in NSW (you wouldnt happen to be in sydney would you). Theres quite a few of us in the biggest city in the country, and as far as your question:
Laser pointers over 1mw in sydney/NSW are illegal. I'm sure thats the law across the country.
BUT!
if you are sensible and build your own, and keep it indoors and dont shoot it at planes, you have nothing to worry about. But to begin with, grab yourself a module, some saftey goggles and some lenses and prisms if you want to experiment.
Things has built his own laser lightshow projector doing around a watt, and I'm in the process of building one myself (doing over 2 watts, just to outdo Things).
Theres also gas lasers (which arent banned), and are pretty cool (I have a 160mw argon on the way. Shine it on a CD and it'll spit out 6 different coloured beams!). These are a tonne of fun, big, noisy and sound like they mean business, or the little helium neons that produce a cute little red spot of a few milliwats, to the big daddy co2 lasers that can burn holes in things much faster than the 445 builds we see on these forums.
Theres tonnes of stuff to do with lasers - I myself am concentrating on my gas problem (collecting gas lasers that is, not flatulance) and my projector and lasers of differing wavelengths.
I cant decide which to buy for my projector next.... the 1 Watt viasho or CNI green, or the quickshow thing
btw that avatar you used is simply cool!
Cheers
Ben