Regardless of what it may say on the label of bag of "small animal litter," softwoods such as cedar and pine are both very bad for rats because of the phenols (oils) in them. They can cause liver damage and make rats more susceptible to respiratory diseases. Hardwoods such as Aspen chips are a safe alternative if you prefer wood bedding. My rats like CareFRESH (a recycled paper bedding). The following articles on safe litters for rats should help you find one that's right for your ratties:

<http://www.ratfanclub.org/litters.html>
<http://www.rmca.org/Articles/litter.htm>
<http://www.rmca.org/Articles/cellsorb.htm>
<http://www.rmca.org/Articles/carefresh.htm>