A hair dryer really isn't powerful enough to effectively groom an longer furred rabbit. It can fluff them up before a show or something, but that's about it. You could also use it to open the cost so you can see where you need to brush more.
If you want to blow out the coat, you need a good blower. Everyone seems to use something different. I have a small Shop Vac that has a blower port. Some people use dog grooming dryers, but these are expensive.
When blowing the coat, you want to open it up, so the nozzle needs to be back from the rabbit. If it is too close, you can cause matting. The goal is to prevent the mats from forming rather than try to get rid of them using the blower.
Most people who use a blower show the rabbit and/or use the wool for spinning. Blowing keeps most of the wool on the rabbit and only blows out the loose wool. Brushing can remove a lot of the wool which is not want people tend to want.