The adjective shabby describes something that is threadbare or worn out. Your last apartment was clean, but the furniture and carpets were so shabby that you were embarrassed to invite your friends over.
The adjective shabby also describes a manner of acting that is mean or contemptible. If you spent your whole childhood treating your younger brother in a shabby way, you can't expect him to be your friend when you're older. In modern slang, if you say something is "not too shabby," you mean that it was good. You might compliment your brother by telling him his soda can sculpture isn't too shabby.