what it does, pump air into the cylinders (through where the spark plug would go) then measures how much leakage there is (through piston rings, head gasket, ect.)

there may be differnt types of leakdown test that do the whole engine that can detect leaks in seals but the one above is the one everyone refers to when they say leakdown test.

you can buy a leakdown test kit for around 100-200 i believe.