Pine pellets are safe as they are kiln dried during the manufacturing process. This removes that harmful oils that can cause problems. It can be a good idea to let a bag air out for a couple days before using it as there can be a more woody smell which could be irritating for a rabbit.
I only use wood pellets in the litter box, not the whole cage. I also use grates over most of my litter boxes (not on the corner ones as those are harder to do). This limits the contact the rabbits have with the litter and keeps them from eating it or just sitting in it and grooming it off themselves.
I have used wood pellet litter for about 5.5 years or so now and have not had any issues. I have used various brands for cat litters to horse stall bedding and wood stove pellets without issue (although some of the cat stuff was more expensive).