Movie theaters use 35mm film projectors. There is a growing number of digital cinemas that use special high def video projectors. These play back the movie from a local hard disk. The movie is delivered to the theaters on DVD-ROM I believe, but there is talk of secure downloading in the future if they can get the encryption secure enough.

Some movie theaters have the capability of projecting 70mm film, but these are very much in the minority.

The Dolby Digital audio track on 35mm film is located on the film itself between the sprocket holes (if you can believe that!) The DTS track is on a seperate CD-ROM that is synchronized with the 35 mm film by use of a SMPTE time code track which is imprinted along one edge of the film.

One of the jobs I did in my distant past was a part time movie projectionist.