Hook helped himself to a record-equalling 22 points against England to stake a major claim for the Wales No.10 shirt at the Rugby World Cup later this year and it will be Williams's task to shut him out on Saturday.
"Once the whistle goes you forget all about being teammates for Wales last Saturday. You simply cannot afford to hold back and not be right on the edge," said Williams.
"James has got what you simply cannot coach into a player: natural rugby instinct. That is what makes those players so dangerous to play against. He is not one of those guys who gets flustered and loses his bottle. His strength is as much about his composure as it is about his handling and running game.
"He first showed that compure in a big Test against Australia at the Millennium Stadium in November. Anyone who may have thought that was a one-off saw him back it up at the weekend against England.
"He is such a talent that it is going to be difficult to play against him, but if the team collectively concentrates on any one player then we will be shooting ourselves in the foot. The Ospreys have so many dangerous players thoughout their team.
"Although Cardiff have played in a Heineken Cup final and two European semi-finals, this is the biggest match since the Blues region was formed and motivation is certainly not going to be a problem for anyone on Saturday."
Williams and Hook will be among eleven players who had game time against England at the Millennium Stadium last weekend involved in the crunch clash. However, Blues prop Gethin Jenkins will miss out after picking up a shoulder injury on Saturday.
"Gethin has had a scan on the injured shoulder and, although he does not require surgery, he will be out for two to three weeks," said Blues Head Coach Dai Young.
"It is not the same injury that he has had in the past and it is not as serious. Although he wanted to play on Saturday it is not possible."
Gary Powell and Taufa'ao Filise will pack down as the props with Young admitting "we had one or two selection headaches." Yet he has no worries over Wales's second choice scrum half Mike Phillips going in against the region he will join in the summer in a major transfer.
"There has been a lot of media talk that this semi-final is a grudge match but to me it is more about a tremendous rivalry and an important game that both set-ups want to win," said Young.
"Mike's move to the Ospreys at the end of the season is high profile and has had a lot of attention but I know he will go out there and give it his best shot, as he has always done for Cardiff.
"Overall this is a game that could go either way between two evenly matched teams. The one that makes the least mistakes and takes their opportunities will come out on top and it would be lovely for us to achieve something this season."