An idiomatic expression which may convey one of two meanings:
1. A statement delivered as a compliment, but which contains an implied insult.
2. Damning with faint praise.
Sometimes also described as a left-handed compliment, these are sometimes delivered with obvious sarcasm or complete deadpan.
A: Wow! You're apartment looks great, especially given your poor taste and reluctance to spend money.
B: Gee thanks. You've take something friendly and turned it into an Irish compliment. Jerk.