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The shit's tits refer to the best part of a bad situation. Referring to the bright side of something negative.

Somewhat the polar opposite of the bee's knees.
I fell down pretty hard on those steps...but this bitchin' arm cast is the shit's tits!
by Turdburglar1991 September 29, 2010
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Mostly you would say something is "the shit" if it's bangin or something, but if it happens to be particulary phat, you could elaborate, saying something is "the shit's tits" being the best or most valuable part of the shit, or the "best of the best."
igg 1: You ever had Smirnoff Ras with Cranberry and Grapefruit juice?
igg 2: Yeah dude, that stuff's the shit's tits!
by Adam November 05, 2007
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