You need to enable the device-mapper with crypto-support in your kernel.
See my device-mapper HOWTO for details.
Testing LUKS
To test LUKS, you can use loop to make a blockdev out of any container file.
The only requirement is that it's larger than 2 MiB.
I'll use /dev/loop5 in the following examples.
root@osiris:~# cryptsetup luksFormat /dev/loop5
Enter LUKS password: foobar
root@osiris:~# cryptsetup luksOpen /dev/loop5 myvolumename
Enter LUKS password: foobar
key slot 0 unlocked.
root@osiris:~# ls -l /dev/mapper/myvolumename
brw-r----- 1 root root 254, 0 Jan 1 1970 /dev/mapper/myvolumename
Then you can work with this device like with any harddisk partition:
root@osiris:~# mke2fs /dev/mapper/myvolumename
root@osiris:~# mount -t ext2 /dev/mapper/myvolumename /mnt
When you are done, don't forget to remove the device: