Basically belt or sash, as I understand it. Etymologically, it is related to "sharp", which is vaguely associated with the physical attributes of belt/sash. If it helps, the spelling is similar to "scarf" in English, which alludes to the meaning. As for pronunciation, dialectical variation results in either "šwärp" (sh-w-ey-(usually trilled)r-p), or "hwärp" (hw(simultaneous)-ey-(trilled)r-p). IPA would be "ʃwe:rp" or "ʍe:rp" - at least according to my own ears. And I can't hardly pronounce it, either, but I can understand it spoken.
I don't know about the standard, but there's really a lot of regional variation. It can even sometimes sound like a mix between hw [ʍ] and f, or between shw[ʃw] and f sometimes, or just as ʃ with no w sound. Basically it's a voiceless fricative (voiceless fricatives include "sh", "f", soft "th", "s" in English and "kh" in many Germanic as well as Semitic languages) with labialization (movement of the lips to change the sound). IPA symbols used for Swedish sj (or skä in this case) include: [ɧ] (basically hw but different, listen below), simultaneous [x] (kh) and [ʃ] (sh), [fˠʷ] (similar to phew! in English) and [x̞] (less friction than [x]), among others. My guess is [ɧ] is more common, but any of them are used. Here is a clip of [ɧ]: http://en.wikipedia.org/wiki/File:Voiceless_dorso-palatal_velar_fricative.ogg
Belte is Norwegian, bälte is Swedish but seems to be slightly less common than skärp by number of google results, but not by a lot and both yield pictures of standard leather and fabric belts. Upon further inspection, belte/bälte/belt all come from Old Norse (North Germanic) while skärp comes from Frisian (West Germanic language between Dutch and English) and meant "to cut" (i.e. sharp) so I guess Sweden just borrowed this word since a belt "cuts" the wearer down the middle in a figurative sense, or maybe since it has a sharpish edge/is fairly flat like a blade.
Ultimately, both are used in Swedish and bälte appears to be almost as common as skärp, so it should be accepted, but it may be dialectical.