well, my knowledge of physics and optics isn't gr8, but a similar technology create the same type of screen using a dry fog which is created from plain water.
since light has to be reflected of something in order for us to see it, and since the guys at IO2 don't say what "a nearly invisible plane of transformed air" is, i am guessing they manage to make the air molecules reflect light which hits them, but this change to the structure of air is only short lived, since there is a limit to the size of the image u can create with the device (distance from where the air come out of).
i did find the following statement from the inventor, which suggest it might involve some electro-magnetic affect - "it moves through a dozen metal plates and then comes out again". they also claim that operating their device in a closed room won't change the air inside in any way.
as for the addition of a top panel, i am guessing a more powerful stream of this changed air might be less affected from air coming from the "side" of this virtual screen, but on the other hand, u might need much more power to create this stream, and u might get some sort of vertical distortion in the image cause of that high speed. it is also possible u can not change the air if it move in above a certain speed or in high pressure.
i hope some expert in physics and optics could explain all this, since IO2 like to keep this a secret.