Personally, I don't mind LOL or ROFL, or any of the others. Usually though, whenever I'm laughing or doing some other action or 'emote' in an instant message or other online text, I use asterisks to demarcate it from what I'm saying. My online chat-based Dungeons and Dragons group uses this convention too, to avoid confusion.
Examples:
- *laughs happily* Nice joke there, Chavs!
- It may be important to our quest! *picks up item and examines it more closely*
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You know, just once I'd like to meet an alien menace that wasn't immune to bullets. - Lethbridge-Stewart, (Doctor Who TV series)