To sit on schpilkes roughly means to be seated uncomfortably, to be anxiously waiting for something or to be ready to jump up at any given time. Literal translation of "schpilkes" is needles or pins, so the English phrase equivalent is "sitting on needles on pins". It just happens to sound better in Yiddish, of course.
And as per usual with Yiddish, it sounds a helluvalot dirtier, too.
(xposted from a journal entry of mine... I used this phrase and felt the need to define it for everyone.)