HD memory loss, huge sparse bundle file!!

[macker1771]

i have a problem i hope someone can solve. i have a 120GB macbook pro...about 50GB used up with applications music and films. i am down to about 4GB free memory on my HD.. Aaaah. i have a rapidly shrinking harddrive. yes i have emptied the trash, i downloaded Disk inventory x, ran it and i have a huge " sparse disc bundle file ( 60GB)". i have done a little research into it, i believe its because i have wrongly had ´file vault´ turned on. now i am in a situation, i wont let me turn file vault off.. requires over 60GB of free space... i have an external 320GB HD which i use Time machine on. even if i clear out myHD i still wont have enough free space to turn off file vault. can i move the sparse bundle file to the external HD??..can i just delete it?? can anyone give me some advice... thanks