The Laser Sword is a very powerful weapon, being able to cut multiple zombies in half at once. Its speed and durability are low, however, making the weapon less than effective when dealing with large quantities of standard zombies. It is powerful against psychopaths, mercenaries and other powerful enemies, which are found less frequently, and subsequently require stronger weapons to be dispatched effectively.
It is a very effective anti-Psychopath weapon for a first-time playthrough, as the combo card is acquired from a movie poster and doesn't require leveling up to obtain.
Check the Maintenance Room behind the stage in the Slot Ranch Casino to find both raw materials needed to make this weapon in one place.
In Dead Rising 2: Case West, the Laser Sword can be combined with another combo weapon known as the Lightning Gun to create the Laser Gun. An all-powerful gun which can practically disintegrate all zombies within its range.
Despite both the Flashlight and Gems being available in Dead Rising 2: Case Zero, you cannot use them to create a Laser Sword.
In Dead Rising 2: Case West, whenever Frank performs the Double Lariat attack while holding a Laser Sword, the weapon will not extend outward like its Dead Rising counterpart did.
A quite obvious referenece to the Star Wars Lightsaber.
It is easy to create a Laser Sword since the Gems and Flashlights are usually close together in the Platinum Strip. Also, both components are found together in the maintainence room behind the theater in the Slot Ranch Casino.
In OTR the laser sword has it's own jump attack, similar to the katana sword.
The psychopaths in DR2 are much more resistant to the laser sword than the psychopaths in the original game.