Well, after looking around a bit, and finding a lot of talking about LUN and LUN explained ... etc, it turns out that from the iscsi-initiator host OS (client) point of view, a LUN is simply a disk ... every LUN regardless of being the only one in a given iscsi-target or whether there are multiple LUNs in an iscsi-target, its a disk, and if things are configured correctly, every LUN will give you a disk device like /dev/sdx or something similar .
So why have multiple targets each with one LUN or have multiple LUNs in one iscsi-target? again, as far as i understood from this very helpful post, from the client (initiator) perspective, its the same thing ... all are disks. just accessed with seperate iscsi-initiator procedure or with a single one, from server (target) perspective, distributing LUNs is just a managerial issue, and seperating LUNs into multiple targets helps the administrator to make policies about who is allowed to access which LUNs by distributing them among targets, and possibly setting authentication.
So ... what does all the talking about using LVM and software raid and other stuff all about ? well, after understanding that the LUN is somehow simply a disk to the client, you can do with it whatever you do with a disk! or multiple disks :) ... so you can format the LUN (now its a disk, like /dev/sdf) or you can use LVM to create Logical volume from multiple disks, which might be iscsi LUN or just old good regular disks :), or setup software raid , again, all this can be done on regular disks, scsi or sata or ata ... and now on LUNs too, you basically stop talking about LUN after iscsi-initiator is done with logging to the target and getting the LUN, afterwards, you treat it as a disk.
Now possibly you have RAID and LVM ...etc on the server side ... whats the story there ? and whats the strory with the word "carved" that is used in a couple of places online when talking about LUNs? ... the idea if fairly simple, when you have LUN on the target, you define where the real storage is going to happen, so on the target you define Path to where the actual storage will happen so you say for example
Path=/iscsi-exports/2GBDISK1.iso
or Path=/dev/sdc
or Path=/dev/sda5
...etc. as you can see you can put any file that you usually use for read and/or write to, and as you might already know, even regular files can be treated as disk volumes and you can mount them using a loop device. so these partions, disks, regular files or even iscsi LUN from a diffrent iscsi-target (which would appear as devices) can be used for a LUN, now these files, partions, disks ..etc, can reside on a hardware raid, or be part of an LVM, or software raid or anything else you can think of you can store data on, and might as well be a regular disk partion or a whole disk that is used as a LUN :).Note:please feel free to correct me if there is something wrong or unclear in this post