In celebration of it being Sunday, SpongeBob made a sundae using unconventional ingredients because he did not have ice cream and because bananas and cherries were "boring." It gave SpongeBob bad breath that caused everyone in Bikini Bottom, excluding Patrick (because he doesn't have a nose), to avoid him, and since SpongeBob did not realize it was because of his breath, he assumed it was because he was ugly. Patrick tries some of the sundae, causing SpongeBob to realize that the sundae gave them both rancid breath.
Peanut plant (including the dirt)
It is strange, as cherries and bananas are popular ingredients of real sundae, and SpongeBob doesn't think they would be good ingredients. Of course, though, this isprobably just SpongeBob's nature.
In Battle for Bikini Bottom, there was originally meant to be a stinky sundae power-up. This was scrapped before the game's release for unknown reasons.
In the online game Stinky Swagger, SpongeBob has to collect sundaes in order to keep his bad breath.