You could use Legos.
Start with several stacks of the same color 2x2 blocks representing Physical Volumes.
Place them in a Volume Group by taking each stack apart and laying it out as a grid, keeping a separation between each stack's blocks and the others. Explain that each nub represents a Physical Partition.
Then show a stack of some other color single blocks, with the blocks numbered. Point out that it looks a lot like the Physical Volumes did, and for good reason. It's a Logical Volume (you might have them equate Logical with Virtual), each nub represents a Logical Partition, and as far as a filesystem is concerned, it looks and behaves just like a real Physical Volume.
Allocate the Logical Volume by snapping the individual blocks to the Physical Volume blocks.
Now show a stack identical to the first Logical Volume, and numbered in the same way. Distribute this copy to illustrate LVM mirroring. Two copies of block one, two of block two, etc....with each set split between physical volumes (hence the separation in the first step.)
It's simple from there to allocate other Logical Volumes (new colors), illustrate striping, reorganization, migration, extendvg, reducevg, etc...
Thanks for asking the question! Now I know exactly how I'm going to explain it next time.
Rod Knowlton
IBM Certified Advanced Technical Expert pSeries and AIX 5L
CompTIA Linux+
CompTIA Security+