Pounding it out the bottom is all you can do, a lot of the time. Sometimes you can screw a bolt into it, and wiggle it around to bend the arms of the star more and loosen it up enough to pull out.

You can just bend it straight and use it again, until it breaks.

Not sure what the LBS guy was raving about, but the nut and top cap serve to apply the proper preload to the headset bearings before the stem's steerer clamp is tightened. Once you have the bearing preload right and the stem aligned with the wheel you don't need the top cap and star nut again until the stem is loosened.

It's hard to imagine a good way to apply preload without it, either... hanging off the bars while tightening the steerer clamp sounds pretty dodgy.
Edit - heh, Wilfred's just pwnt me with a bunch of ideas.