bhobba said:
Intuitively the coherence leaks out to the environment - it interacts with with other objects that scrambles its phase so you end up with a phase of zero - that being the average of the phase of the objects that randomly changes it.
Technically you do what is called tracing over the environment which transforms a pure state to an improper mixed state.
Sorry for being nitpicking, but I think that needs a little clarification, as well. The tracing over the environment is something
WE do in analysis, it's not a physical process.
Mathematically, what's going on is illustrated by this simplified picture:
Suppose you have a system composed of two subsystems, A and B (for example, cat + environment), in an entangled state:
| \Psi \rangle = c_1 | A_1 \rangle | B_1 \rangle + c_2 | A_2 \rangle | B_2 \rangle
Now, suppose that you have some observable O that only depends on the second subsystem. In that case, its expectation value will be given by:
\langle \Psi | O | \Psi \rangle = |c_1|^2 \langle B_1 | O | B_1 \rangle + |c_2|^2 \langle B_2 | O | B_2 \rangle
(Entanglement prevents cross-terms such as \langle B_1 | O | B_2 \rangle)
This expectation value is the same as if you had used system B alone and used the mixed state with density matrix
\rho = |c_1|^2 | B_1 \rangle \langle B_1 | + |c_2|^2 | B_2 \rangle \langle B_2 |
So the use of mixed states from this point of view (this is from Everett's original paper on the Many Worlds Interpretation) reflects (1) Entanglement, and (2) observations/measurements that only depend on a subsystem. So when you have a system entangled with the environment, since it is very difficult to directly measure anything about the environment, you can ignore it for most purposes by using mixed states.