A halo product is something that isn't there to be the real flagship that's driving the revenue, but instead to be the ultra-cool item that people really lust after, associate that with the brand, then buy one of the lower end models.

For example, the Ford Shelby GT500 http://www.ford.com/cars/mustang/trim/shelbygt500/ is probably not even turning a profit for Ford, but when someone picks up an automotive magazine with an article about the car, it makes them more likely to buy the entry level Mustang at 40% of the cost, or any other Ford product.