Ability to add "Sketch Tools" tool to a custom or pre-existing toolbox is broken in ArcGIS 9.3.1. You can add the "Sketch Tools" tool to a toolbar by following the steps in the "Steps to Repro" in versions 9.2 SP6 and version 10 SP1, but not in 9.3.1 or 9.3.1 SP2. If this is "as per design" then the documentation needs to updated.