Pot stands for potentiometer, which is an apparatus that measures the potential (or voltage) which has a user-adjustable resistance. Usually, this is a three-terminal resistor with a sliding contact in the center. Basically, it tells the laser how bright to shine to resolve issues of the drive not reading media.
The potentiometers or pots are located in the laser head's side if you want to try and adjust them. Just be careful in adjusting them though, because it's known to kill some lasers. Most gamers, suggest not going below 3.0 when adjusting your pots.
Download and follow this step by step guide made by Moda from Xbox-scene, on how to tweak your pot. A lot of people swear on the effectivity of this tutorial.
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* Chg: Median instead of arithmetic mean is now used to get calibration values, this should increase accuracy