You probably have multiple copies of Airfoil installed on your Mac. Mavericks (and potentially Mountain Lion) seems to get easily confused when trying to target apple events when there are multiple versions of the same app on any mounted disk. Delete all but the latest Airfoil app and reboot.
Thanks for that - although I still have the problem.
I've tried deleting the only copy of Airfoil I can find, rebooting, reinstalling (it is just a copy of the file to the applications directory) and the problem remains.
Then you're experiencing another bug that was introduced either in Airfoil, Mavericks, or some combination thereof. I believe I have a workaround for that issue - 6.0.8, which should land in the next several days, will hopefully solve the issue.
Turn on debugging (Plugins->Airfoil->Toggle Debugging)
Restart the plugin (Plugins->Airfoil->Reload
Let it run until it fails
Turn off debugging (Plugins->Airfoil->Toggle Debugging)
Then email me (indigo DASH support AT perceptiveautomation DOT com) the log from the time the plugin restarts (just copy/paste from the event log window).