Bookshelf

New and Good

David Ball Backwards and Forwards : A Technical Manual for Reading Plays. Great material for playwrights, directors, and actors as well as students. Gives a great view from the stalls.
Michael Bloom Thinking Like a Director. Director's POV. You cannot afford to not know what and how a director thinks.
Shelly Frome Playwriting : A Complete Guide to Creating Theater. Wonderful insights.
Stuart Griffiths How Plays Are Made . A short book that summarizes all the essentials. I'm told by the publisher that you can purchase this book here.
Stuart Spencer The Playwright's Guidebook. Structure, creative process, problems, advice, recommended reading, exercises.

Older and Better

Aristotle Poetics. One I found useful is Aristotle's Poetics by Francis Fergusson. It contains an introduction that takes you through some of the more obscure passages.
Michael Chekhov Michael Chekhov : On Theatre and the Art of Acting. Anton's nephew helps you understand what the actor needs from the script.

Lajos Egri Art of Dramatic Writing. Contains all the essentials and more. Has everyone else copied him?

Maren Elwood Characters Make Your Story. Drives home the point that it's all about character.

Academic

Peter Brook The Empty Space. Deadly theatre.
Robert Brustein Dumbocracy in America : Studies in the Theater of Guilt. Urbane, witty, and true look at what passes for theater.
Culpepper, Verdonk, Short (Eds.) Exploring the Language of Drama : From Text to Context. Very good on 'turns' in dialog (the significance of who speaks next).

If you can find...

Michael Checkhov On the Technique of Acting .

Josaphina Niggli Anything by her. Cuts to the chase. Brilliantly simple.

Playwrights to read

Howard Barker Collected Plays : Claw, No End of Blame,... Collected Plays : The Love of a Good,... Off center and always surprising.
Horton Foote Collected Plays. Video: Alone The playscripts and screen script demonstrate Foote's brilliance at quite conflict.
Brian Friel Translations, Philadelphia, Here I Come.
John B. Keane The Field, The Year of the Hiker.