I heard something tear underneath my knee cap when I bent down to pick up a towel. It hurts bad! What happened?

Knee cap. Could be a number of things, from a tendon or cruciate tear to some innocent "creaking". Let it rest for two weeks, if then it still hurts, you'll need an orthopod to get an MRI of your knee.
Strain. It may just be a strain. Try some rest, ice, and a nsaids(advil, etc). If it does not improve see a doctor.