The Bug is a character/inventory item who first appears in The Mole, the Mob, and the Meatball.
Sam & Max buy the bug from Bosco, as a "BoscoTech listening device". While he's not exactly as expected, he does the job just fine: he can scurry to a good hiding spot on his own accord and replay any overheard conversation word-by-word and in the voice of the character originally speaking it. Sam & Max still have him in Abe Lincoln Must Die!, where they use him for some political manipulation (besides a lot of for-fun snooping and prank-calling). The bug's Reality 2.0 form is a computer bug capable of disrupting the C.O.P.S.'s control over Reality 2.0.
After Reality 2.0 the bug goes on to lead his own life. He is seen dabbling in Prismatology in Bright Side of the Moon and hanging out at Stinky's Diner with his family in Ice Station Santa, and at the wedding at the end of Season Two. He is last seen after the wedding chatting with Satan, Satan asking if he's interested in a blackmail opportunity.
When not playing back someone else's voice, the bug talks like a stereotypical drill instructor, and especially likes to use the word "maggots" and refer to his time in "'Nam". He is the one in two inventory item from Bosco that you use in more than one episode, the other is tear gas grenade launcher.