Somatic hybrids are:

The correct answer is Option (2) → Isolated protoplasts from two different varieties of plants - each having a desirable character

A protoplast is a plant cell whose cell wall has been removed, so it is surrounded only by the plasma membrane. If the protoplasts of two different varieties are fused, they form a hybrid protoplast. This can be grown into a new plant. Such a hybrid is a somatic hybrid, and the process is somatic hybridisation. The purpose is to combine the good characters of both parents.

(1) Isolated protoplasts from two different varieties of plants - each having an undesirable character — Incorrect. The aim is to combine desirable characters, so no one fuses protoplasts for their undesirable characters.

(2) Isolated protoplasts from two different varieties of plants - each having a desirable character — Correct. This is the definition of the protoplasts that are fused to make somatic hybrids.

(3) Isolated protoplasts from three different varieties of plants - each having a desirable character — Incorrect. The definition speaks of two varieties, not three.

(4) Isolated protoplasts from three different varieties of plants - each having an undesirable character — Incorrect. It is wrong on both counts: the number of varieties and the kind of character.

NCERT Extract:
Biotechnological Applications in Agriculture – “… Scientists have succeeded in culturing meristems of banana, sugarcane, potato, etc. Scientists have even isolated single cells from plants and after digesting their cell walls have been able to isolate naked protoplasts (surrounded by plasma membranes). Isolated protoplasts from two different varieties of plants – each having a desirable character – can be fused to get hybrid protoplasts, which can be further grown to form a new plant. These hybrids are called somatic hybrids while the process is called somatic hybridisation.”