What is the effective difference between an inline air separator vs a air vent at the high point in a recirculating water system?
The air separator is in the wrong place (it should be right after the heater/boiler) in the loop, as hotter water holds less air/gasses in solution than cooler water, so that's where it's most easily/effectively separated. The cooler return side is a poor choice of location.

The high vent serves to trap bubbles that escape the separator out of the loop, since circulating pumps are poorly suited to pushing large bubbles around. 

I need to check, but I'm pretty sure the expansion tank is in the wrong relationship to the pump, as well. Yes, indeed. The arrangement shown increases the liklihood of cavitation, which accelerates wear and damage to the pump, shortening its life