I think it's wrong to laugh at people, for the most part. I don't think it's right to insult others for fun or mock people (at least, not to their faces). But there are some people I've met who I can't help but laugh at. And I will even sometimes make a point to openly laugh at them. For example, when I see a teenager with his jeans down to his knees, then a pair of basketball shorts down to his thighs, then a pair of boxers showing, all the while holding this ridiculousness up with one of his hands as he walks... I laugh. I'm not really into fashion, but I see no point in wearing a pair of pants that require you to hold them up while you walk. If I have to hold my pants up, that means they've either torn suddenly or I've walked in front of Wayne Szalinski's machine without warning.
So anyway, I usually make it very obvious that I'm laughing at how stupid he looks. In fact, I will often point so as not to leave any doubt that he is the reason I'm laughing. My wife doesn't like this because she thinks I'll get shot or mugged or something. But I'm usually in the mall or in my car. And let's face it; I can outrun anyone whose pants are at their ankles.
I did this to a kid in a gas station parking lot over the weekend. I made sure he was looking at me, then I stared at his pants and laughed very deliberately and loudly. And his friend whispered something to him. I'm assuming it was, "Dude, that guy's laughing at your pants." So the pants-down kid frowned, and the friend joined me in laughing. I felt a little vindicated that a teenager realized the ridiculousness of his friend's clothing choices. Maybe I made a difference in that kid's life. Maybe he'll clean himself up, buy some pants that fit (and maybe a belt), and become a great young man. It's nice to know I could have changed his life. They shot and mugged me, but it just might have been worth it.