In the past day, the Chinese military forums have been buzzing over what appears to be a full scale mock up at the Wuhan ship design institute (also known as 711 institute of China Ship Design Institute). Pictures of it can be shown below. From the look of it, the island is going to contain all of the radar and electronics on the real carrier. I find it hard to believe that the building itself can take the pounding of the helicopter or the naval fighter taking off and landing. I also question that the ski jump is strong enough to support a naval fighter taking off. I'm not sure if this facility has any aircraft elevators, but I can't really spot one. So, I think this will definitely be used to test the radar and electronics that will be on a real carrier (in this case, it looks to be what Varyag's island construction is to become). They replicated surroundings to make the testing more realistic. And I think there are other carrier operations that they can prepare for. Although, it's hard to tell what they will be just looking at these pictures.
We see a picture of Z-8 and something that looks to be a flanker on top of the roof. From this, I think it indicates that naval flanker and Z-8 are likely to be form the air wing for the first generation of carriers. Now, if we look at the pictures, the Chinese naval fighter looks to be slightly different from your typical flanker. In the pictures below, it looks this fighter might have canards. Now, many people have commented that the naval flanker here (I believe J-15 is designation given in PLA) is a mock up. I've seen some of the helicopter mock ups they've put on ships during the testing phase and at least Z-8 isn't a mock up. I also don't think the naval flanker is a mock up. Although, it also doesn't make sense for them to put a prototype on there when they are not likely to conduct flight testing.
Finally, we also have a bunch of pictures showing the recent modification efforts of the island on the Varyag. Although the pictures are kind of murky, it appears that they have several faces ready to be installed something like the APAR radar from 052C (aka HLJG346)