The title is working on a few levels here. First and foremost, American Beauty is a kind of rose—and as you have already gathered, roses are kind of a big deal in this movie.
Then, of course, there is the fact that the movie is pretty concerned with American life and how image-conscious (read: superficial) Americans can be—at least according to the movie's portrayal. Carolyn would probably say she was interested in making things beautiful, but you could argue that she's really just all about making things "perfect." We're pretty sure that, as far as she's concerned, "beauty" and "perfection" are the same thing.
And there's yet another layer to the title that comes courtesy of the movie's insecure teen contingent. Angela and Jane are each, in their own very different ways, preoccupied with their appearances, and the movie tracks their progress toward recognizing their own beauty.
Of course, if you're Ricky, you don't have to look to roses or young girls for beauty—something as simple as a plastic bag floating in the wind can be beautiful, if it allows you to see or feel something meaningful. Lester's ability to find peace, meaning, and beauty in the mundane details of his life (as it flashes before his eyes) is perhaps his big achievement in the film. So, in short, the title is firing on a few different cylinders.