I don't know how widely used it is as a phrase (I don't think I've heard or seen it before), but it is fairly clear what it means.
Wisp is a very slight trace (wisp of smoke), or minute quantity (wisp of hair), or otherwise almost invisible (will-o'-wisp).
Ether would probably be better written æther and refers not to the family of chemical compounds but to the all encompassing substance that the Michelson-Morley experiment proved did not exist (some hundreds of years after Descartes time, of course).
Therefore, 'the mind stood separate from the physical body as a wisp in the æether' refers to the mind being like a will-o'-wisp that cannot really be seen, but can influence the body. Mind is qualitatively different from the body, yet undetectable except through its effect on the body.