A catchphrase invented by slick Motorola salesmen to sell more high-tier radios to people who don't need them.
Why should you buy these $5500 radios? Interoperability.
This old saying indicating how a person walk after having too much to drink originated in New England. Wind mills used for grinding grain had four blades. Big sheets (similar to sails) where stretched across the blades (or woven between the slates). The wind mill would wobble when only three blades were loaded, hence the term "three sheets to the wind"
After consuming a bottle of rum, Bob was walking as if he had three sheets to the wind.