Turn on your audio source and adjust the volume so you can barely hear the output on your speaker and then set up the laser and receiver so that the beam strikes the front face of the photoresistor. As soon as the beam hits the photoresistor, the impedance will vary significantly and you will hear a pop and probably a bunch of noise. Play around with the position of the beam to see how the position of the beam on the face of the photoresistor alters the reception of the audio signal. You will see that the optimal position for the beam is just touching the surface of the photocell so that any changes in the beam position from the vibrations will result in the most significant swing in voltage at the output of your headphones. If all you hear is a loud hum, then you probably have too much ambient light in your room. Incandescent light bulbs actually vibrate at 50 or 60 Hertz, and you will hear that in your system as a loud constant hum. As you have probably guessed, the Laser Spy system will not perform very well in the daytime due to ambient light sources competing with your laser beam, but this is fine since real spies usually operate in the darkness!
If you have your speaker and laser setup on the same workbench, then the process of targeting your photoresistor was probably only a 10 second job. Now, try to place your speaker at the other side of your room and see how long it takes to get the beam back to the target! I found that the distance across a room made the alignment significantly more difficult and even the deflection on the floor as I walked around made huge changes in the position of the beam. You will also have noticed that any slight vibrations of your desk or speaker stand resulted in all sorts of wild and wacky sound effects coming through your headphones. At one point, I was able to hear my own voice due to the thin surface of one of my tables vibrating the speaker stand.
These initial tests become very important so that you understand how well the Laser Spy system works, but at the same time how incredible finicky it will be to align at any real distance. Even though your test rig consists of nothing more than a cheap laser pointer and three semiconductors, it is actually a fully operational unit that could actually listen to a conversation a mile away if you could somehow capture the return beam. Seriously, this $2 unit is not much inferior to those "professional" Laser Spy devices you can find on the Internet being sold for hundreds or thousands of dollars! All they have to offer is some built in audio filtering and a more stable alignment hardware base. If you feed the output from your test rig into a real-time computer filtering software and mount everything to a solid base, you would have a system as capable as any available. Scary, huh? But we can actually improve the sensitivity of the receiver, so let's do that.