The sound clip is a sound bite, often ripped directly from an .mp3 or YouTube video that is used in the process of editing. These words/sound-effects are often explicit, adding to their entertainment value. The very first youtube user to make a spongebob edit was Klusignolo. He would use primarily sound clips from Tenacious D songs. He figured it would be funnier than just dubbing over curse words that he said himself. Some of the first sound-clips that he used the most prevalent sound clips that are still being used. The vast majority of Klusignolo's sounds were ripped from Tenacious D's "Inward Singing", as it contains a slew of cursing with no music in the background. "Inward Singing" contains fan favorite sound clips including "fuck you" and "piece of shit."
Though at first sound clips consisted of roughly the 20-30 swears that Klusignolo would use, other youtube users decided to start editing, and the stockpiles grew, some to the point of collections reaching the upper hundreds.
A list of sound clips and places of origin can be found here.