You put the coral in a bag with just enough water to keep it moist and fill the rest with air. The idea is that the corals can't foul the water during shipping and it makes it easier for the coral to get O2. If you fill the bag with enough water to keep the coral submerged, the O2 above the water has to diffuse into it and then into the coral. Without the water the O2 only has to diffuse through the coral's mucus layer so surface area is maximized and the distance of diffusion is minimized. It also saves a lot on weight.
It works great for hard corals, anemones, zoas, snails, crabs, shrooms, and probably a dozen other things I'm forgetting. I've never tried it with Xenia, leathers, or most other softies.