It was a vicious protector of a namesake cave where the location of the grail is written on the wall. It (comically) was capable of leaping at least eight feet from the ground directly at a person's neck and biting through it in a single motion, often decapitating them before they even realize they are being attacked.
It did so with three of King Arthur's knights, despite Tim the Enchanter's repeated warnings. However, Arthur and his knights had to enter the cave, so they finally killed the rabbit from a distance, with the Holy Hand Grenade of Antioch.
It was also in Spamalot. Some think that the cave's name came from the rabbit itself. It would explain why the cave wouldn't be named the Cave of Aaaugh.