Chapters 8, 9, and 13 mention bundles but I can't really find anywhere in the book where bundles are described. Ch 13 does mention they are binary files, and Ch 9 mentions 'hg bundle' and 'hg unbundle' commands, but don't really describe what they do.
FWIW, the book could mention that bundles are compressed binary changeset data. They are small and easy to pass around, and you can overlay them onto a real repo: "hg -R BUNDLE log". You can clone from them: "hg clone BUNDLEFILE DEST", if you create whole copies of a repo's history with the "hg bundle --all FILENAME" option which are handy for backups or copying onto a usb stick, etc.
I didn't know where I should stick a comment for this, so I made a bug instead. :-)