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New Sponge was a TV Spot which only appears in the episode "Model Sponge."
In the TV Spot, SpongeBob plays a kitchen sponge, which is used by Hans, the big human hand, to clean a dirty and muddy bathroom. When Hans wants to clean a toilet with SpongeBob, SpongeBob doesn't want to, and then holds onto the edges of the toilet, forcing Hans to try and push him in the toilet. After that, SpongeBob retires, saying that the job of cleaning the bathroom is not right for him, and goes back to Mr. Krabs, begging him to give his job as a fry cook back. In the TV Spot, the Photographer calls SpongeBob the New Sponge.
New Sponge most likely went into production because SpongeBob refused to do the part and quit before the commercial ended.
New Sponge is a very strange name, considering that even if it was old it would still be New Sponge.