In basketball, if a player has soft hands that means he has good control of the basketball and has good dribbling ability. The player might also be referred to as a great ball handler, since many of the skills of a good ball handler are the same as those of a player with soft hands.
Soft hands also is another term for a player with good hand-eye coordination.
You may have heard this terminology used in other sports. In football, a player has soft hands if he can catch the ball well and is not clumsy. In hockey or lacrosse, a player has soft hands if they can handle the puck or ball skillfully and deke players.
A soft shooter in basketball is a player that shoots softly and with accuracy. A point guard should have soft hands to make three point shots consistently. Alternatively, a big man who hangs around the basket is not as required to have soft hands. However, it would certainly help with his rebounding and shooting.