Quick copy and paste from the GDAL mailing list. Details to follow.

From: 
Markus Neteler 
  To: 
GeoWiz 
  CC: 
Gdal-dev@lists.maptools.org
  Date: 
Today 10:54:38 am
On Thu, Dec 15, 2005 at 08:31:14PM -0700, GeoWiz wrote:
> I was wondering if there are any good open source projects going on that 
> involve processing lidar data.
> 
> Thanks,
> Steve 

Steve,

you may check GRASS 5.4, it contains the software from Prof Maria Brovelli,
Italy. See the src.contrib/POLIMICO/ directory.

Here the README details:

LIDAR data filtering
--------------------

Command execution order:

1. s.bspline.reg
2. s.edgedetection
3. s.growing

s.bspline.reg/  : bilinear or bicubic spline interpolation Least quares approach
s.correction/   : DTM correction: error removal (building remainder, vegetation etc)
s.edgedetection/: detection of building edges, vegetation edges, etc.
s.growing/      : filling of previously computed edges

Additional software
s.to.qrast/     : fast sites to raster conversion (replaces s.to.rast)

Related Publications:
- GRASS Users conference 2002, Trento, Italy
  http://www.ing.unitn.it/~grass/proceedings/proceedings/pdfs/Brovelli_Maria_Antonia.pdf

- Brovelli, Maria A, Cannata, Massimiliano & Longoni, Ulisse M (2004)
  LIDAR Data Filtering and DTM Interpolation Within GRASS.
  Transactions in GIS 8 (2), 155-174.
  Online: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=
showTOC&journalCode=tgis&volume=8&issue=2&year=2004&part=null

Note that 5.4-CVS contains some updates which will appear in the
next 5.4.x release of GRASS.

Hope this helps

 Markus