This is a great question,
Technically, gifts, including cash and value of services are considered taxable gifts for gift tax purposes. If the parents were to give the child and future spouse 100K to put towards expenses, then this would be a taxable gift. Gift tax return must be filed when one individual gifts more than 12K to another individual within one tax year (gift return rules will follow).
However, if one considers the impact of cultural traditions, it is commonplace for the parents to be responsible for "throwing" or providing the wedding. Therefore if the parents pay for the services of the wedding directly instead of gifting money for the wedding, this would not constitute a gift for tax purposes, since the parents are the purchasers of the services.
Gift Tax Rules:
An individual can give a gift of up to $12,000 in one year (2007) to another individual before any gift tax implications kick in. If you give above $12,000 to any one individual, you must file a gift tax return. The $12,000 is your gift tax exclusion. There is a separate 12,000 exclusion to each person that you make a gift to. Any amount over this is applied to your lifetime limitation of 1 million dollars.
Up to 1 million dollars, there is no gift tax due, because of something called the Unified Credit. After the 1 million dollar lifetime exclusion gets used up, gift tax percentage ranges from 18-45%.
Keep in mind that certain gifts are not subject to gift tax, such as to political organizations, between US resident spouses, and gifts that are made for directly to a school or medical facility or professional for tuition or medical expenses paid on behalf of another.
Also to note, any unified credit used for gift tax purposes will reduce the amount of credit that can be used for estate tax purposes.