Why does my server keep crashing?

It keeps crashing, twice in the span of 10 minutes and here is the crash report. please help D:

---- Minecraft Crash Report ----
// Surprise! Haha. Well, this is awkward.

Time: 8/3/12 2:58 PM
Description: Exception in server tick loop

java.lang.NullPointerException
at net.minecraft.server.ItemTool.a(SourceFile:40)
at net.minecraft.server.ItemStack.a(ItemStack.java:206)
at net.minecraft.server.ItemInWorldManager.breakBlock(ItemInWorldManager.java:286)
at net.minecraft.server.ItemInWorldManager.a(ItemInWorldManager.java:87)
at net.minecraft.server.EntityPlayer.h_(EntityPlayer.java:139)
at net.minecraft.server.World.entityJoinedWorld(World.java:1219)
at net.minecraft.server.WorldServer.entityJoinedWorld(WorldServer.java:498)
at net.minecraft.server.World.playerJoinedWorld(World.java:1201)
at net.minecraft.server.World.tickEntities(World.java:1106)
at net.minecraft.server.MinecraftServer.q(MinecraftServer.java:541)
at net.minecraft.server.DedicatedServer.q(DedicatedServer.java:212)
at net.minecraft.server.MinecraftServer.p(MinecraftServer.java:472)
at net.minecraft.server.MinecraftServer.run(MinecraftServer.java:404)
at net.minecraft.server.ThreadServerApplication.run(SourceFile:539)

Relevant Details:
- Minecraft Version: 1.3.1
- Operating System: Windows 7 (amd64) version 6.1
- Java Version: 1.6.0_24, Sun Microsystems Inc.
- Java VM Version: Java HotSpot(TM) 64-Bit Server VM (mixed mode), Sun Microsystems Inc.
- Memory: 1642029480 bytes (1565 MB) / 2145320960 bytes (2045 MB) up to 3212509184 bytes (3063 MB)
- JVM Flags: 8 total; -Xmx3G -Xms2048M -XX:+UseConcMarkSweepGC -XX:+UseParNewGC -XX:+CMSIncrementalPacing -XX:ParallelGCThreads=4 -XX:+AggressiveOpts -Xincgc
- Type: Dedicated Server
- Is Modded: Definitely; 'craftbukkit'
- Profiler Position: N/A (disabled)
- Player Count: 3 / 16; [EntityPlayer['Tommmmmy236'/11058, l='World', x=817.84, y=106.00, z=-22.67](Tommmmmy236 at 817.837023951941,106.0,-22.665732240015345), EntityPlayer['Redeyebdragon'/19285, l='World', x=691.91, y=75.00, z=-86.08](Redeyebdragon at 691.9126403424749,75.0,-86.08092795076391), EntityPlayer['manup123456789'/19958, l='World', x=966.30, y=68.00, z=-316.03](manup123456789 at 966.3000000119209,68.0,-316.0308403504419)]
- World World Entities: 0 total; []
- World World Players: 0 total; []
- World World Chunk Stats: ServerChunkCache: 625 Drop: 0