Sprite (hardware)
On the SNES hardware, a sprite is an image drawn at a specific part of the screen. Unlike regular layers, each sprite image can move independently from each other. Furthermore, sprites also always use 4bpp graphics, no matter which BG mode is used. Only two different sprite sizes can be used at the same time, the two size available depend on bits 5, 6 and 7 of $2101. In SMW, the two sizes used are 8x8 and 16x16. The sprite data is stored in OAM, the graphics for them are stored in VRAM and the palette in CGRAM.
Limitations
Only 32 sprites can be used on the same scanline (this is refered to as 'Range Over')
Only 34 sprite tiles (8x8) can be used on the same scanline (this is refered to as 'Time Over')
The OAM can only hold up to 128 sprites.
Sprites are never hi-res.