  We demonstrate several new results for the nonlinear interferometer, which
emerge from a formalism which describes in an elegant way the output field of
the nonlinear interferometer as two-mode entangled coherent states. We clarify
the relationship between squeezing and entangled coherent states, since a weak
nonlinear evolution produces a squeezed output, while a strong nonlinear
evolution produces a two-mode, two-state entangled coherent state. In between
these two extremes exist superpositions of two-mode coherent states manifesting
varying degrees of entanglement for arbitrary values of the nonlinearity. The
cardinality of the basis set of the entangled coherent states is finite when
the ratio $\chi / \pi$ is rational, where $\chi$ is the nonlinear strength. We
also show that entangled coherent states can be produced from product coherent
states via a nonlinear medium without the need for the interferometric
configuration. This provides an important experimental simplification in the
process of creating entangled coherent states.
