You tried to pass a variable named 'aa' into the method.

1.9.2p290 :001 >  "the_string".crypt(aa)
NameError: undefined local variable or method `aa' for main:Object
	from (irb):1
	from /Users/steve/.rvm/rubies/ruby-1.9.2-p290/bin/irb:16:in `<main>'
1.9.2p290 :002 >  "the_string".crypt("aa")
 => "aaA8bm5HCtDYk"

See?