Bundled software is any software that includes other software with the installation. The bundled software is usually described in the EULA, or End User License Agreement, that may or may not be shown at the time of downloading.

Some popular software may contain bundled software.  When you install a program they may ask if you would like to install additional software during the installation.  By default many bundled software packages automatically check the box to install the bundled software.

Example as of 05-01-2014:

Adobe Reader comes with McAfee Security Scan Plus bundled with it unless you uncheck the box before installing.

Other software may include browser bar addons that may display unwanted advertisements, track your web use etc.