Recently I have been asked by several brides, "Who are you supposed to invite to the rehearsal dinner"? My answer usually is, "well, this is your wedding - - so whomever you want". But if you look up wedding etiquette (and this is what I have always thought myself) - the answer is: the bridal party (bridesmaids and groomsmen), immediate family and out-of-town guests.
The bridal party and immediate family are a given - but people are usually thrown for a loop with the out-of-town guests (especially when there are a significant amount of them). This is how I look @ it. The rehearsal dinner is the perfect time to spend catching up with the family and friends you don't get to see on a daily basis. You can exchange the "How have you been's", "What have you been up to's" even the "thank you so much for coming's". This dinner should be relaxed, laid back and it's not meant to break the bank. It should not "out shine" your wedding by any means. Choose a restaurant with a great entertaining area (maybe a patio or larger private room) and in a price range you (or whoever is paying) can afford. Spend your time laughing and telling stories and catching up with everyone. This should include the out-of-towners. Keep in mind that, in most cases, they have paid for their plane ticket, their hotel room, their transportation and no doubt a wedding gift for you. The night before the wedding, they most likely won't have plans (seeing as though they don't live in the area) so all the more reason to include them in your rehearsal dinner.
All this time spent catching up means you don't have to do it at the wedding. I can't tell you how many times I have watched the bride and groom spend their ENTIRE reception walking around, thanking people for coming and catching up! The bride and groom should be enjoying the delicious food they spent months picking out - and sipping on the champange they have been toasted to with - and creating new memories on the dance floor while listening to the music from the DJ or band they just had to have. They should be a part of the wedding they created and enjoy their perfect night.
No matter how it plays out - just sit back and enjoy the moments. They are going to FLY BY! :)