Rabbits, like snakes, are an oddity in that you butcher them in your inventory and the pelt is automatically gathered; thus no skinning is required. The dryed pelts can be sold in Boston for the same price as deer pelts.
Rabbits make an excellent source of meat and hides for weaker players. A rabbit is easily killed using Punch or Uppercut and then walking away until it runs at you, hit it again as it approaches, walk away again... until it is dead.
If you have at least 15 YB, a rabbit can be one-hit-killed with an Uppercut.