what does "Air or a Halo around instruments" mean?

It means the instruments have their own distinct space, with a buffer (of air) between other instruments. It generally implies a 3 dimensionality sound of the instrument or group of instrument--where each has it's own distinct place in the soundstage. Planers and electostatics generally perform this "air" very well, where as horn speakers (in general--not all) do not.

I hope this helps a bit... I liken it to the halo effect one sees around a street light late night with a bit if humidity in the air. The sound around instruments is somewhat the same, occupying its own space that black velvet contract of space or background(quiet background)is what makes this effect possible. This effect allows
the sound to bloom like a ripple in a pond until the sound wave has completed its course. It isn't a predominate effect but one which depending upon certain musical arrangements or style of music which can add an element of emotion which draws one into the music at which point you are no longer a spectator but a participant.
Thats my take on it and I feel tube equiptment is the best at delivering this type of sound, if done correctly.
Good luck and continue searching for that sound its out there.
PS. This effect is the result of the sum total and NOT any one piece of equipment, but consider cabling as an important element of this synergy as well.

Eantala, there is a difference between "air" and "halo". when i owned Wilson Watt/puppy 3/2s and then later 5.1s there was a definite "halo" of energy around images that i became enamored with. this "halo" would slightly highlight and blur images.....but at the time i liked it. my opinion is that it was an artifact and not natural. when i upgraded to the WP6 the "halo" went away....and at first i thought i was missing something. then i realized that on the WP6 images were much more 3-dimentional and organic. and that i was getting ambient clues previously obscured by the "halo".

"air" can mean a few different things; it can mean a sense of real space that the instrument occupies.....it can mean the "presence" of the room and resolution of the total space....it can mean the high-frequency extension and floating sensation of notes as they decay. obviously, these meanings are related but slightly different. another way to put it would be to say that "air" and "open" are similar.

"air" sounds natural....."halo" is an artifact of the reproduction chain. you will never hear a "halo" in a live performance (based on my interpretation of that word).

Abstract7 is right to my mind. If you listen for example to a solo violin or a solo piano very carefully, you will notice, how the tone appears and spreads in the soundspace with its overtones forming a cluster around its tonal core, if you like. If you were to translate this into colour, it would, for example be like a strong red at its central core, which then would spread out, like ripples from a stone thrown into a pond, into different hues of red, getting weaker and weaker in intensity. It is how the tone, or a succession of tones, spead and decay after their first appearance, which is called the halo. If a system reproduces this well, it has , as Abstract has suggested, air. Electrostatics do this quite nicely, though still far from the real thing.