It is widely believed that cedar shavings negatively affect the health of animals. Reportedly, the phenols (aromatic oils) which so effectively kill insects, harm the respiratory tracts of our pets and may cause liver damage.
Debbie Ducommun has written a good article on the problems associated with bedding mice on pine or cedar (liver and respiratory problems). Both Jeff Johnston and Nathaniel Cook describe the effects of plicatic acid (found in cedar) and abietic acid (found in pine) on the respiratory system.
Marinell Harriman (in consultation with Marliss Geissler, DVM, and Carolynn Harvey, DVM) reported "elevated liver enzymes" in rabbits with pine litter boxes. She theorized that for rabbits, early liver disease may be related to bedding on pine shavings. Read more at Guineapigcages.
Given the availability of better beddings, never use cedar. Choose a safer bedding for your pet instead.
PINE: And if you're using pine, be sure to air the shavings thoroughly and use in a well ventilated cage. Airing the shavings will allow the volatile oils to dissipate.
While some people find it useful to line the bottom of the cage with newspaper and place another bedding on top, newspaper alone is a poor bedding material. It does not absorb liquids well, does not control odors, and must be frequently changed.
Corn Cob Bedding
Corn cob bedding has a tendency to mold, does not control odors, and is reportedly hard on a cavy's feet, making it a poor bedding. Cavies will sometimes eat this bedding, which reportedly swells when wet. Corn cob bedding can contribute to impaction problems in males.
Straw is non absorbent, can mold, and the stiff stalks may cause injuries (especially eye injuries) to your pet.