Congress chief Sonia Gandhi on Thursday surprised India by announcing that Pratibha Patil would be UPA's candidate in the Presidential election. The Congress revealed this ace up its sleeve when Sonia realised that big names were not finding acceptance across the board.
I'll add a bit to that definition: '...an advantage that other people don't know about.' In many card games, the ace (the card with only one pip - Image:Ace playing cards.jpg - Wikipedia, the free encyclopedia) has the highest value - often 13, sometimes more. Someone who wanted to win a card game by cheating would hide an ace up his sleeve.
Anyone (not just a card-player!) hiding an unfair advantage has 'an ace up his sleeve'.
A very closely related expression is "an ace in the hole." I'm not much of a poker player, but it means the same thing - you have an advantage that you can use later. Unlike the "up your sleeve" though, it does NOT mean that it's an unfair advantage.