While it's true that Webster, Random House and all the other (American) authorities give both spellings, I have always thought that "theater" is the preferred American spelling, and "theatre" is the British spelling (note to ChrizJen - British, not European!)
I'd go further and say that using "theatre" in the U.S. is a tad pretentious. But then I googled "Broadway theater" and "Broadway theatre", only to find that it is this latter spelling that is somewhat more common. Well, live and learn ...