This thesis focuses on functionalities that are important for the realisation of future all-optical packet switched networks, and which may be implemented using the interferometric wavelength converter. The European IST research project DAVID, with the aim of demonstrating the feasibility of a Tbit/s optical packet switched network exploiting the best of optics and electronics, is used as a thread throughout the thesis. An overview of the DAVID network architecture is given, focussing on the MAN and WAN architecture as well as the MPLS-based network hierarchy. Subsequently, the traffic performance of the DAVID core optical packet router, which exploits wavelength conversion and fibre delay-line buffers for contention resolution, is analysed using a numerical model developed for that purpose. The robustness of the shared recirculating loop buffer with respect to´bursty traffic is demonstrated and compared with a standard fibre delay-line based output buffer. Moreover, the effectiveness of the recirculating loop is demonstrated through a 55% reduction in the switching fabric size enabled by a small reduction in the offered load per input channel from 0.8 to 0.6. Different techniques for interferometric wavelength conversion are discussed and the performance of the IWC is analysed experimentally based on the all-active Mach Zehnder and Michelson interferometer. Wavelength independence over the entire C-band is verified and wavelength conversion at up to 40 Gbit/s using the differential control scheme is demonstrated with a 0.6 dB penalty. Moreover, using a novel device denoted the DOMO MZI, co-propagational conversion to the same wavelength, an important functionality for practical networks, is demonstrated at 10 Gbit/s with a 2.4 dB penalty. Finally, a novel conversion scheme involving the injection of an additional clock signal into the IWC is presented. Results show very good transmission capabilities combined with a high-speed response. It is argued that signal regeneration is an inherent attribute of the IWC employed as a wavelength converter due to the sinusoidal transfer function. This is verified experimentally at 40 Gbit/s on an input signal degraded by noise. Moreover, conversion to a 40 GHz clock signal, which enables re-timing, is demonstrated with a power penalty of 0.5 dB. The excellent regenerative capabilities of the novel conversion scheme are verified at 10 Gbit/s with a 4 dB improvement in receiver sensitivity. Finally, regeneration without wavelength conversion is demonstrated at 40 Gbit/s in an MZI with a 2.5 dB improvement. Additionally, the IWC’s capabilities for simultaneous time division de(multiplexing) and wavelength conversion are demonstrated experimentally for 40 to 10 Gbit/s demultiplexing and 2x10 to 20 Gbit/s multiplexing. Lastly, the IWC’s capabilities as an optical logic gate for enabling more complex signal processing are demonstrated and four applications hereof are discussed. Logic OR and AND are verified in full at 10 Gbit/s using PRBS sequences coupled into an MI. Moreover, logic XOR is demonstrated in an MZI at 10 and 20 Gbit/s with good results. Using an MI, the excellent performance of a novel scheme for MPLS label swapping exploiting logic XOR is demonstrated at 10 Gbit/s with a negligible 0.4 dB penalty. Finally, three novel schemes are described, involving all-optical pattern recognition by bit-wise sampling at multiple wavelengths, optical identification of bit differences in data segments through a combination of logic XOR and AND, and all optical bit sequence replacement through logic OR and AND. The schemes enable important signal processing functionalities in packet switched networks to be implemented all-optically in a simple and cost-effective manner, and can be implemented using a single IWC.