Most audiophiles mean "speaker disappearing" in a virtual sense, however, as I will explain, there is actually a way to make speakers REALLY disappear. If you are interested to learn how to do this then read on...
The sense you have of speaker location is very often a combined effect of baffle edge diffraction and driver dispersion. Consider that the acoustic wave will fold around the edge of the speaker box and at this point will produce some diffraction; imagine a wave flowing along a river that empties into a larger harbour => the wave suddenly loses energy as it spreads out around the mouth. An acoustic wave does the same as it goes from a "half-space", the space in front of the speaker baffle, to "whole-space' as it encounters unrestricted space beyond the edges of the speaker box.
Generally a very small box or tall narrow speaker will disappear better than a larger box speaker because the diffraction, although severe in this case, will occur very close to the primary sound and becomes less distinguishable. (Bose cube speakers use this technique to good effect, as does Gallo) A triangular shaped baffle can sometimes help in a big box speaker, furthermore, big box speakers can have the mid and tweeter drivers placed off centre in order to reduce the audibility of edge diffraction. The worst cases of edge diffraction leave one with a "claustrophobic" impression of the sound....a good design will sound "open" sometimes described as the "disappearing act".
Assuming good high end speakers all have drivers with excellent dispersion then the box shape, size and smoothness of corners etc. becomes the most significant factor. (Although a less dispersive driver can reduce edge diffraction effects by focussing more energy straight in front, this creates other serious problems such as a very narrow sweet spot and a rather unnatural sound - generally narrow dispersion speakers are rare at the high end...although Dunlavvy SC IVs are a famous example)
The big problem with using very small or narrow "disappearing" speakers is that they employ small drivers => the trade off is higher distortion (particularly in the bass and lower mid), poor dynamics, and poor performance at higher (live music) volume levels. However, for nearfield listening at close range (most domestic situations) this design is clearly the most popular in the industry today.
Fortunately there is a solution to "disappearing act" in a big box speaker => soffit mount the big speakers in to a wall. This completely eliminates the edge diffraction problem altogether (note that even small narrow speakers still have edge diffraction problems even if these are not as intrusive as with their bigger bretheren). To understand this you probably need to experience it first hand and unfortunately this is not something you will find on a Hi-FI show room floor. However, a web search and perusal of almost any high end studio's main monitor installations will confirm that soffit mounting is a popular solution for big box speaker installations. (Pros want the best dynamics and best accuracy at live music levels but without any edge diffraction problems.) To see that this is true you only need to think about it. A soffit mounted speaker has physically DISAPPEARED, as there is only a wall left with drivers in it! A soffit mount is no imitation of the speaker "disappearing act" through careful baffle/box design....it simply is no speaker at all or an "infinite speaker" if you like. Only the diffraction and dispersion of the drivers themselves remains.
