Erik, it just works for me. I have LUKS on a partition on a USB stick. When inserted I get a dialogue box asking for the LUKS password. I had to configure hal a little to give the desktop icon a good name:
I wrote a post on using udev together with Gnome Volume Manager (GVM). My recent upgrade to Ubuntu Breezy revealed that my hack was just that, a hack, and a bad hack at that. It doesn’t work in Breezy!
It turns out there’s a right way of doing this—use HAL! As so often I could have saved some time by simply reading the comments in the configuration files in /etc. (BTW, this is exactly the reason why I love Debian/Ubuntu. The configuration files are their own documentation. Brilliant, simply brilliant.) Anyway, playing around a little with HAL’s fdi files wasn’t a bad thing I guess. In the end I retired my udev setup from my earlier post and put the following lines in /etc/hal/fdi/policy/local.fdi: