The basic concept of a laser rangefinder is straightforward: A laser pulse is emitted from the rangefinding device. When the pulse reaches an opaque object, it is reflected back to the sender. The sender detects the reflected pulse and determines the duration between the emitted pulse and the received pulse. The system then uses the speed of light to convert the duration into a distance.
As you might expect, actually implementing a laser rangefinding system is a bit more complicated. The primary difficulty here is the speed of light—which, as you know, is a very large number. Since light travels at 3×108 m/s, it covers 1 m in 3.3 ns. A clock period of 3.3 ns corresponds to a clock frequency of 300 MHz, which is certainly not unreasonable. If we want to resolve something on the order of 0.1 m, though, we’re talking about a clock frequency of 3 GHz, and a digital system clocked at 3 GHz is by no means a trivial design task.
The easiest way to deal with extremely-high-speed clock design is to avoid it altogether, and that’s exactly what a chip like the AS6500 allows you to do. It’s a time-to-digital converter, i.e., a device that is specifically designed to measure the duration between two events and convert this into a binary number.
When a system does not need to have extremely high precision, the time measurement can be based on typical counter functionality: a clock signal drives a digital counter that starts counting when the pulse is emitted and stops counting when the reflected pulse is received.
However, this approach becomes impractical when the goal is to resolve very small distances—the necessary clock frequency is simply too high. The AS6500, for example, has a maximum time resolution of 10 ps. A clock period of 10 ps corresponds to a clock frequency of 100 GHz—I don’t know the details of the internal measurement architecture of this IC, but I’m willing to bet that it does not have a 100 GHz clock driving a 100 GHz–compatible digital counter.
I’m definitely not an expert on high-precision rangefinding techniques, but apparently there are several methods that can be used to overcome limitations associated with excessively high clock frequencies. This paperon picosecond-resolution time-interval measurements mentions the Vernier method, interpolation methods, and tapped delay lines.