Because their diet is high in cellulose which is difficult to break down and low in other nutrients (relative to the quantities of cellulose), one go through the intestines is not enough to break it down and get all the available nutrition - so after the first run through the intestines, they produce "cecotropes" - which they then eat to digest again - in the wild they would just deposit these in the grass wherever they happen to be. Then the second time round, it is faeces, and is usually done in one place. The easiest way to litter train a rabbit is to see which place it picks to urinate and defacate, and then put a litter tray in that spot. I don't know how easy it is to stop a rabbit leaving its cecotropes all over the place though, because it's not going to do them in the same place as faeces and urine - but then it's not really poo at that stage either, so it depends how squeamish you feel about the possibility of treading semi-digested food into the carpet!
Other things to consider - they should be neutered/spayed, they need to chew things and should be provided with wood to keep their teeth from overgrowing, they like to dig (and those hard thick claws can damage carpets and soft furnishings!), in some countries (UK definitely and I think maybe Australia) they need vaccinations I think every 6 months, and they're not very cuddly pets - but they are entertaining. Mine always liked to play with footballs.
ETA: I wouldn't trust my cats with a rabbit even if I were standing over them, especially not a dwarf - if you do decide to consider a rabbit, a larger one may be less likely to be seen as prey by your cats!