This line:

my @out = split(\s(AND|OR)\s/i,$string);
[download]

looks screwy to me. Perhaps you meant:

my @out = split(/\s(AND|OR)\s/i,$string);
[download]

Update: Here is a quick rewrite that I believe does what you want...

#!/usr/bin/perl -wT
use strict;

my $string = "something and something else or this thing here";
my $new    = join(' ',
             map {/^(and|or)$/ ? uc($_) : "tools.description LIKE \"%$
+_%\""}
             split(/\s*\b(and|or)\b\s*/,$string));
print "S:$string\n";
print "N:$new\n";

=OUTPUT
S:something and something else or this thing here
N:tools.description LIKE "%something%" AND tools.description LIKE "%so
+mething else%" OR tools.description LIKE "%this thing here%"
[download]

Reading the complicated line from bottom to top.

• We split the string into a list of and/or/other pieces.
• Then convert that list using map, uppercasing and/or and putting some surrounding text around other.
• Finally we join the list back together.

-Blake