It is a tool for reengineering 3rd party, closed, binary Android apps. It can decode resources to nearly original form and rebuild them after making some modifications; it makes possible to debug smali code step by step. Also it makes working with app easier because of project-like files structure and automation of some repetitive tasks like building apk, etc.
Web site: http://forum.xda-developers.com/showthread.php?t=1755243
Source code: https://github.com/iBotPeaches/Apktool
Code license: Apache