Steps to describe how to create Bundle Product ?

1. In admin panel click on Catalog->Manage Products.

2. Click on Add Product button.

3. Select (Attribute Set -> default & Product Type -> Bundle Product) from drop down box.

Now, Complete the Product Information like Simple product, with the exception of the following Field under below tab:

On the General tab
Set both the SKU and Weight fields to one of the following: you can set either Dynamic or Fixed.

On the Prices tab

Set the Price Field to one of the following: Dynamic or Fixed

(If using a Fixed value, enter the actual value in the field to the right.)

set the Price View Field to one of the following:
    1.As Low as
    2.Price Range

Now, Click in the last tab called bundle items at the left side. In this tab, you can see the two section Shipment & Bundle Items.
1. With Shipment section, you can select products in bundle should be shipped together or separately.

2. With Bundle items section, you can add bundle items.
In the Default Title box, enter a label for the bundle item appear on Product page. Then, do the following:

a) Set the Input Type (Drop-down), You can also select one of the following:

Multiple Select
Radio Buttons
Checkbox

b) Set Is Required as needed.

c) Click the Add Selection button, You can see a form, click on the Reset Filter button, select products/items you want to add and finally click on Add Selected Product(s) to Option button at the right side of this form.