Here are some sample function to encrypt and decrypt from and to streams (replace the algo by the one you prefer):

public static void Decrypt(Stream input, Stream output, byte[] key, byte[] iv)
{
    using (SymmetricAlgorithm algo = SymmetricAlgorithm.Create()) // Creates the default implementation, which is RijndaelManaged. 
    {
        using (CryptoStream stream = new CryptoStream(input, algo.CreateDecryptor(key, iv), CryptoStreamMode.Read))
        {
            byte[] bytes = new byte[16];
            int read;
            do
            {
                read = stream.Read(bytes, 0, bytes.Length);
                output.Write(bytes, 0, read);
            }
            while (read > 0);
        }
    }
}

public static void Encrypt(Stream input, Stream output, byte[] key, byte[] iv)
{
    using (SymmetricAlgorithm algo = SymmetricAlgorithm.Create()) //Creates the default implementation, which is RijndaelManaged. 
    {
        using (CryptoStream stream = new CryptoStream(output, algo.CreateEncryptor(key, iv), CryptoStreamMode.Write))
        {
            byte[] bytes = new byte[16];
            int read;
            do
            {
                read = input.Read(bytes, 0, bytes.Length);
                stream.Write(bytes, 0, read);
            }
            while (read > 0);
        }
    }
}

You can use them with any output stream. If you want to write to a large output stream, you can use that output stream directly (for example a FileStream or ASP.NET Response.OutputStream, etc.), you should not use an intermediary MemoryStream which will consume memory for no real purpose.

That being said, if you really want to use a MemoryStream, you would do it like this:

MemoryStream output = new MemoryStream();
Encrypt(input, output, key, iv);
output.Position = 0; // rewind the stream, so you can use it from the beginning