A sharp tool is someone who has a knack for something, is a smooth operator, and can make things happen. They may or may not also be a bit of a knob.
If you are called a sharp tool, you should be initially flattered when the word 'sharp' is said, then more uneasy following the word 'tool'.
If you are confused, you should examine the identity of the poerson who said it. If they resemble a pirate, you should probably not take offense.
The Wicksta nailed that analysis, and then he stole my lunch... he's a sharp tool.