1. An adjective meaning awful, horrible, or the worst. The opposite of 'the shits' is 'the shit', used to describe something that rules or is generally really awesome. 'The shits' generally refers to something that sucks to just short of the greatest extent possible.
2. Another word for diarrhea. You get the shits when you eat something that makes your feces take on a primarily liquid form.
"Man, Weenus's breath is the shits. I can't believe I let him hiss right up my nose. It's so disgusting but I just can't stop."
"I sure wish I hadn't eaten all that rat shit. I think I'll have the shits for the rest of my miserable life..."