I managed to find the actual text of the Holy Star spell online.
Cover: The holy star gives you a +10 cover bonus to AC without affecting your actions.
It's explicitly just an AC bonus. It doesn't give you cover as a whole nor the other benefits of cover (such as the bonus on Reflex saves, no AoOs, etc.). It's just an AC bonus that (presumably) doesn't stack with cover. Also, it looks like the spell was reprinted in Spell Compendium. Among other things, the AC version of the spell got transformed into a +6 circumstance bonus to AC.