After googling for ages, I could not find an answer to bundling downloadable product, as in the downloadable product will not appear under the bundle items search section. After some tough digging, I noticed magento community version 1.6 only accepts virtual and simple product in a bundle.
the config is at app/code/core/Mage/Bundle/etc/config.xml, about line 103.
To get downloadable items to appear under bundle items search, update the xml to
<allowed_selection_types> <simple/> <virtual/> <downloadable/> </allowed_selection_types>
Wondering why they only allow simple and virtual products? Perhaps downloadable products are buggy or not well testing if bundled?
One more thing, also make sure the downloadable product has “Links can be purchased separately” set to “No” as well.
A lot of people would be bundling downloadable product in magento… I hope varien would consider fixing this in the next update.