I'm tense and nervous,
I have always assumed that this expression was related to tentative, and because of this I have never quite grasped the correct meaning; tentative means hesitant or uncertain, whereas 'on tenterhooks' actually means tense or tight.
Another misconception that I had regarding this expression, and one which I think many other people share, is that it is actually 'on tenderhooks', which somehow furthers the idea of it involving hesitancy, perhaps because one of the shades of meaning of 'tender' is 'careful'.
In fact, the expression has its roots in 18th century England, and originated in the technical language of woollen cloth production. After weaving, the cloth would have to be washed and carefully dried in order to avoid excessive shrinkage and to straighten the weave. To achieve this, the cloth was stretched very tightly over wooden frames known as tenters, to which it was attached with... tenterhooks. It would therefore have made perfect sense to someone familiar with this process to describe an extremely tense person as being 'on tenterhooks'.
As with so many other expressions in British English, despite the fact that the origins are now thoroughly obscure, the expression is still in occasional use.
Don't touch me I'm a real live wire!