How to setup rebound? I have fancy new full-suspension bike and both shocks have this strange setting, called Rebound. It's a red dial, beside the blue CTD lever.

Increasing it makes the shock less responsive to small obstacles. Thus, pedal bob is reduced. However, if I max it out, the shock becomes so stiff, that even jumping onto the saddle (the bike is stationary) from quite some height doesn't move it a bit.

What are some guidelines to tune my fork and rear shock for the terrain that I ride in and for my mass? 

My rear shock has CTD. Why would I ever want to limit the travel and sustain high pedal bob, when I can just increase the rebound and enjoy efficient pedaling?



It is known from Linear systems, that a suspension can roughly be modeled by 

m*a + b*v + c*s = Fs, where
m - mass
a - second derivative of position with respect to time
b - damping coefficient
v - first derivative of position
c - spring coefficient
s - position
Fs - fore on the suspension element.


Is rebound the same as the coefficient b above?
Rebound is close to b in your equations above. The guides I've seen and used recommend the following procedure for setting rear shock rebound. 

Ride over a sidewalk curb ( ie. 4-5 inch drop ) and adjust the rebound until you have only one bounce. I.e. you want the shock to be able to absorb a hit, but not keep rebounding to cause you to lose control. 

Setting the rebound on the front fork is similar, but not as straight forward. Find a short bumpy descent and keep doing it until you feel like you've got the best control. It's a balance between absorbing the hit and keeping control of the front wheel. If the front shock is "bouncing" more than once after the hit you are don't have control during the up phase.

If you set the rebound too high, the shock won't be able to function as designed to absorb the terrain. If you think of it as a wave form, you want the rebound to not significantly damp out the initial height of the wave, but to damp out the oscillations as quickly as possible. 

As you get better and faster you will likely need to tweak the rebound. The trick is to always find that balance between absorbing the hit and sustaining the hit through oscillations.