A rabbit foot is received through the hunter skill by snaring a rabbit. It can be made into a strung rabbit foot at level 37 Crafting by using a ball of wool on it. It was thought that the strung rabbit foot could be worn to increase the chances of obtaining a bird nest drop while cutting a tree; however it was revealed that it actually increases the chance the bird nest containing a bird's egg, not the chance of actually receiving a bird nest.
For an exhaustive list of all known sources for this item, see here
- The foot giving you a higher chance of bird eggs from nests is a reference to the superstition that rabbit feet bring good luck.