Normally, we'd like to understand bitul as loosing oneself in HaShem. Connecting one's finity to God's own infinity and being lost. These understandings are beautiful and poetic and belie the practically insurmountable effort necesary to achieve such a state. Ever try to run to something infinitely far away? No point right? it's infinitely far away.
Actually the whole question of how can we relate to HaShem stems from this same idea, how can the finite ever relate to the infinite? It's only possible, as Hassidut explains, because we ourselves, at our deepest most secret core, are infinite as well, in fact, it's not even two different infinities, it's the same infinity. At our core, if we dare or care to look, is HaShem.
From this we can learn that one form of bitul, of connecting to the infinite, is sought through turning inward, through letting go of everything outside of 'me'. Then realising that the 'me' is the outside and letting go of that too, until there is no 'me' left.
But, if the inside of the inside (and so on, ad infinitum) is HaShem, then its a simple matter to realise that the outside of the outside (etc) is HaShem too. In fact, these two attributes of HaShem have names: HaShem is memaleh kol olmin - He fills everything, and He surrounds everything - sovev kol olmin.
Which means there's another way to bitul, to connect to the infinity of HaShem. This way is actually the more Jewish way. To connect to HaShem through the world. To engage the world, to transform the world from being HaShem's clothes (that which garbs and hides HaShem) into our clothes. (that which garbs and protects us from oblivion when we stare upon infinity)
When we jump into the world, and immerse ourselves in it as a means to connect to HaShem through all the multitudinous media that present itself, we find there is no nook or crevice that is not overflowing with HaShem's presence.
When we put ourselves into the throng of life in order to find HaShem and seek Him out, to act according to His wishes, His middoth, then we can be far closer to Him than we might do by stepping away from everything that isn't self.
I think this is the true bitul of Hassidut. I think it's obvious from the texts, and it might be something that everyone knows, but it doesn't seem that way, it seems like we've gotten caught up in very un-jewish ideas of what it is to 'self-negate.'
Literally 'hesed' the root of Hassidut is the negation of oneself by relating to an other.