My friend's xbox 360 has been acting strangely recently. It has started to keep saying that any disc he put in was "unreadable".
Some people say that there is some problem with laser.
Has anyone encountered such problem or help to fix it?

First try to hear if the disc is spinning if not then you might want to try opening it up (if your warranty's run out) and put something like oil to make it move. If the problem persistes, use a DVD cleaning disk because optics may be dirty.

You will probably have to replace the DVD drive that is in your Xbox 360. I've had several in other systems fail on me after a couple of years. Yours should still be under warranty so get on the horn and get it fixed.