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Let's say I have a tshirt store. In my store, I sell different types of tshirts each for $10. I'd like to make a special bundle that includes a red shirt, blue shirt, and black shirt at a discounted total price of $25 (instead of $30).

In Magento, is there any way to build a product like this? If I use the API to reduce the quantity of this new bundled item, it should automatically reduce one from each of the respective bundle items (i.e. red shirt, blue shirt, and black shirt). Is this possible in magento?

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Yes there is. In Magento this is called a grouped product and you can read how to implement it here.

http://www.magentocommerce.com/knowledge-base/entry/creating-a-grouped-product

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