A rabbet is nothing more than a dado that is cut into the edge of the face of the stock rather than in the center of the stock. A rabbet is great for when a shelf needs to be placed flush with the top of the shelf standard or for placing a plywood back on a cabinet.
How to Cut a Rabbet:
As with a dado, the most common way to cut a rabbet is with a stacked dado head cutting set on a table saw. Traditionally, a sacraficial strip of wood is placed against the fence and then the sacraficial strip is placed against the dado set.
This method will prevent damage to the table saw's fence.
Another common method for cutting a rabbet is to use a router table with a straight cutting bit. Use a featherboard to hold the stock down to the table, which will insure a consistent cut.