What is sparse image bundle?

It's your Time Machine backup. It sounds like you have had at some point Time Machine running and it created backups of a device. You can delete it if you don't need the backups.

 

It's not necessarily a Time Machine backup, sparse images can be created for other reasons, you can create them yourself in Disk Utility.

e.g. It could be an old iDisk loacl folder that was backed up to your drive when iDisk service ended.

 

http://support.apple.com/kb/HT4878

If you don't need the space immediately, just leave it alone. Local snapshots are self-policing and they'll only take up space when it's available - if space gets tight, Time Machine will clear out snapshots to free up room.

 

A sparse bundle is a type of disk image file.

You should be able to mount it by double-clicking it in Finder. Then you can take a look at its contents to get a clue as to what it is.