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 to avoid him, excluding Patrick because he does not have a nose. 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 does not think they would be good ingredients. Of course, though, this is probably just SpongeBob's nature.
In Battle for Bikini Bottom, the sundae was originally going to be used as a power-up that would allow SpongeBob and Patrick to run faster and destroy Stone tikis. However, this was scrapped before the game's official release.
In the online game, Stinky Swagger, SpongeBob has to collect sundaes in order to keep his bad breath.