A sprite sheet is a way to group multiple images together in one image file. In order to texture a sprite with one of these images, you must have the information of where in the sprite sheet that particular image is found (its rectangle).
Sprite sheets are often organized in two files: the image one and a data file that describes where in the image you can find the individual textures.
TexturePacker to create these files for the game. You can find them inside the
iphone folders inside
Resources. There is a
sprite_sheet.png file for the image and a
sprite_sheet.plist file that describes the individual frames inside the image.
This is what the
sprite_sheet.png file looks like: