First, let me say that I will not help you sabotage someone else's computer, period. Not only would that violate various laws and the forum policies but also my code of ethics.
At the same time, I must express my disapproval of his using the internet access of others without permission, which is also illegal in many areas. (It is considered theft of service.)
That said, I would inform the neighbors of the risks associated with having an unsecured wireless internet connection. In short, anyone could use their connection for illegal purposes (with would trace back to them) or access their personal files. You can print a nice overview of wireless internet security by clicking here. While that would not get your roommate to pay up, you will have helped your neighbors protect themselves, helped to enforce the law, and 'driven your roommate insane,' as you so put it. Just be tactful in regards to how you tell your neighbors about wireless network security...you don't want to make the situation with your roommate worse than it is.
My roommate owes me quite a bit of money and refuses to pay it back. He isn't very computer savvy but he can figure out some basic things. Is there a way I can prevent him from stealing Internet from the neighbors? Not being able to get Internet access would make him go insane. He has a utility on his computer that can figure out what is wrong with his connection if something goes awry. The computer he uses is a brand new Toshiba laptop.
If there isn't a way for me to do this do you have any other suggestions on how to ruin his computer experience?