If your rabbit is not trained to use a litter box, your bedding will be needed for two reasons:
1. As litter to keep the cage and your rabbit clean,
2. As something to sleep or make a nest in.
If you rabbit is trained to use a litter box, you will have litter in the box, so your bedding will only be used for sleeping in, and possibly playing in. (unless your rabbit feels inclined to not use the litter box once or twice)
For a non litter trained rabbit, the bedding needs to completely cover the cage bottom, usually a layer of about one or two inches. It also needs to be changed at least once a week and any soiled bedding needs to be removed daily. I like to use the softest bedding I can find for this kind of use. When you look for the bedding make sure it is absorbent, not dusty, and safe for your pet. Here are some different kinds of bedding you can use:
Aspen wood shavings- inexpensive, does a good job, but not very soft
Carefresh soft wood fiber- very soft, very absorbent, but don't be fooled by the bag it is not 99% dust free! (more like 99% dusty)
Recycled paper bedding- this is a favorite of mine, it is absorbent, can be composted, it's good for the environment and your rabbit, most brands bedding are fairly dust free, and all around a great bedding for your pet. (Sunseed is a good brand to get when buying recycled paper bedding)
Now if your rabbit is litter trained like Munchkin, you only use this stuff in the litter box. So to sleep in he gets some towels (he loves them with all his little heart). He loves arranging them, digging in them, and hiding and sleeping in them. You can also use fleece blankets or purchase a fleece bed for your rabbit.
Note: Never use cedar or pine shavings as bedding. It may smell good but the aromatic oils in them can cause respiratory and kidney or liver problems in your rabbit.
Another Note: If you use something like towels or fleece make sure your rabbit is not eating them.
Next time: The litter box