Preliminary Reading:

REASONING ABOUT QUANTUM ENTANGLEMENT:
[1] B. Coecke "The logic of enatnglement"
short version: http://arxiv.org/abs/quant-ph/0402014
long version: http://web2.comlab.ox.ac.uk/oucl/publications/tr/rr-03-12.html

CATEGORIES FOR THE LOGIC OF ENTANGLEMENT:
[2] B. Coecke "Quantum information-flow, concretely, and axiomatically"
http://arxiv.org/abs/quant-ph/0506132
[3] B. Coecke "Kindergarten Quantum Mechanics"
http://arxiv.org/abs/quant-ph/0510032

CATEGORIES FOR OPERATIONAL PHYSICS:
[4] B. Coecke "Introducing categories to the practicing physicist"
http://arxiv.org/abs/0808.1032
[5] B. Coecke and E. O. Paquette "Categories for the practising physicist"
http://web.comlab.ox.ac.uk/people/Bob.Coecke/ctfwp1_final.pdf
(this is a draft version of a 100 page tutorial on monoidal categories)

EXAMPLES OF MORE ADVANCED PAPERS IN THE AREA:
[6] S. Abramsky and B. Coecke "Categorical quantum mechanics"
http://arxiv.org/abs/0808.1023
[7] P. Selinger "Dagger compact closed categories and completely positive maps"
http://www.mathstat.dal.ca/~selinger/papers.html#dagger
[8] B. Coecke, D. Pavlovic and J. Vicary "A new description of orthogonal bases"
http://arxiv.org/abs/0810.0812
[9] B. Coecke and R. Duncan "Interacting quantum observables"
http://www.springerlink.com/index/y443214116h76122.pdf