You don't need Kies air at all. It's just a way to manage your phone without having ro connect via usb. Did you make sure that you have a "check" mark in the box under menu-->settings-->applications-->usb debugging? Also, exit kies restart your pc/mac(i had to use a mac) there should be options in one of the dropdown menus at the top of the screen, while using kies, top update the drivers. Do that. If youve ever downloaded kies on that computer before make sure that all remnants of previous versions are gone.
Found the solution, DONT plug in your phone, put in the model number and then it will ask for your serial number, after it process it , it will then tell you to plug in your phone, i have tried it all ways and it would always tell me that the phone is not recognized. it is now seeing the phone and updating.