Strength and Dexterity requirements are reduced by 10 each. The new durability is half of the original +1. But it is worth searching for them as such item has bonus damage or defence, reduced durability and requirements, but you will not be able to repair it as usual though. The chance of getting Ethereal on weapon or armour is around 5% of all.
Also, you will see them as transparent pieces of armour or weapons. Ethereal can be on normal, magical, Rare, and Unique items that have durability. It can occur randomly on almost every type of items with some exceptions that we will highlight below. First of all, Ethereal is not a modifier but a flag similar to Superior or Socketed.