Information theoretic measures have been proposed as a quantitative framework to clarify the role of correlated neuronal activity in the brain. In this paper we review some recent methods that allow precise assessments of the role of correlation in stimulus coding and decoding by the nervous system. We present new results that make explicit links between types of encoding and decoding mechanisms based on correlations. We illustrate the concepts by showing that the spike trains of pairs of neurons in rat somatosensory cortex can be decoded almost perfectly without including knowledge of correlation in the read-out model, although in this neural system correlations between spike times contribute appreciably to stimulus encoding.