Is this a solid floor cage or a wire floorcage? Wire floor (in the basket underneath) I'd say newspaperwith a litter box above or below the wire where they pottymost. Solid floor, it depends on your rabbit. Mydutch has a litterbox with Carefresh and a straw mat on thefloor. He plays with the mat but would rather lie on the barefloor. My Nethie became used to Carefresh all over herfloor. If I take it out and leave only the litterbox, shespends the whole day in the litterbox. Carefresh is morepricey, but it is soft, comfortable, and absorbent. The WoodyPet that so many people use here is great for litterboxes, but looksless comfortable over the rest of the cage.
Oh, and some people put a whole bunch of newspaper on their solid floor cage.