I have heard tell how the Sword of Air is a cool a weapon , but have never found any information on where to find or buy that blade. Is it entirely random, or are there preferred locations please?

The magical smiths located in Tarant and Caladon; it's also sometimes in the inventories of the Wise Women (the gypsies on the outskirts of Shrouded Hills, Tarant, Ashbury and Caladon). And of course, it may be randomly found in chests.

But who told you that it was so great? I'm just curious. IMO, its only real selling point is how light it is; though I will admit that it certainly has a pretty intimidating-looking graphic.*

*When sitting in your inventory, that is. As far as your sprite goes, it just shows up as another generic large blade.