Ok this is what i've found so far:
Valonia Algae is a Micro algae, not a Macro algae and therefore considered a nuisance algae in the aquarium. I've found info on four main types:
Valonia aegagropila - Forms light green tubes
Valonia macrophysa - Forms dark green bubbles
Valonia utricularis - Forms non-uniform dark green clumps
Valonia ventricosa - Forms large light green spheres
As the bubbles contain spores it is recommended not to pop the bubbles inside the tank but to deal with it in one of the following ways -
1) Remove the rock that the bubble is on. Place over a container and burst the bubble then rinse off the rock with tank water. Do not return this water to the tank but throw it away. Replace the rock in the tank.
2) Inject the bubble with a hypodermic needle & syringe and suck out all the internal liquid which will contain the spores. Remove the algae 'bag' from the rock.
There is a few mentions of people popping them and seeing no ill effects (it's not just me then
) so it's up to the individual as to how you deal with it................popping them is more fun though