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Which is correct?
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edible.
Pieter, I think both are correct but with a slight difference in meaning, and 'edible' is the more commonly used.

Edible: suitable to be eaten; not poisonous
Eatable (rare): good enough to be eaten
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Although both words mean can be eaten, there is a slight difference between them. Edible refers to waht may normally be eaten whereas eatable refers to the taste or flavor of the food. For this reason, something which is edible may sometimes be uneatable.

The prison food was edible.

Mushrooms are eatable.

Quoted from Wen Shin Use the Right Words, by Ronald Chiu.
Teo
The prison food was edible.

Mushrooms are eatable.

I really believe the examples are switched there.

- Some mushrooms are edible (they can be eaten with no harm to your health), but most of them are not edible (they will kill you or give you a stomach ache). Edible is a universal quality applied to that thing.

- The prison food was eatable (because not only it was prepared with edibles, but the dishes were done well, cooked with care). Eatable is a specific quality applied to that food in front of you and the current "state" of it.

That way, tequila worms are edible (you can eat them if you want), but are not eatable (you don't wanna do it...).
eatable
ADJECTIVE:Fit to be eaten; edible: an eatable meal.

NOUN:

1. Something fit to be eaten. 2. eatables Food.

edible

ADJECTIVE:
Fit to be eaten: edible roots; an edible mushroom.

NOUN:
Something fit to be eaten; food: edibles such as vegetables and meat.

The American Heritage® Dictionary of the English Language, Fourth Edition. Copyright © 2000 by Houghton Mifflin Company. Published by the Houghton Mifflin Company. All rights reserved.

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To me, these definitions are more clear:

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eatable

describes food that is good enough to eat, though not excellent

edible
suitable or safe for eating:
Only the leaves of the plant are edible.

http://dictionary.cambridge.org/define.asp?key=24791&dict=CALD
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As an American, I don't know that I've ever seen "eatable" used and most people would think that you just used the wrong word and meant "edible."

"Eatable" is very rarely used here.
I don't like eatable myself, but it seems to be used at the New York Times, although crushed by over 100 times by edible(which shows that GG's right) in the pollsEmotion: smile

http://www.google.com/search?hl=en&q=site%3Anytimes.com+eatable&btnG=Google+Search

including by this US senator:

The Arizona Senator: McCain Quits Race but Stops Short of ...

"There's no way you're going to be able to meld everything Bush said and McCain said and get a broth that's eatable," said Senator Chuck Hagel, ...
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