A Soul Bomb is an extremely destructive weapon that uses Light, fueled by the power of over a couple hundred thousand souls, designed to destroy the Darkness. Because of its use, it is arguably the most destructive weapon ever created.
The bomb's power depends on the amount of souls inside, and the crystal used can take in at least 200,000 souls. Rowena was able to insert all the souls inside Dean Winchester; however, Dean would only be able to contain it for about an hour before it exploded on its own.
To activate the bomb once inside himself, Dean needed only to press his thumb and index fingers together. How devastating the explosion would have been was never shown, though it would certainly have cost Dean his life and also could have potentially destroyed the Darkness. Ultimately, Dean did not use the soul bomb, instead convincing the Darkness to reconcile with God. After the Darkness healed God, God removed the souls from Dean before departing the Earth.