A theory of stochastic flows over the algebra of observables of a dynamical
system is presented in which the main objective is to ensure that the over
all canonical/symplectic structure on the algebra is preserved. We study bo
th classical and quantum systems and the importance of physical interpretat
ion in the Stratonovich interpretation is stressed. We find the natural for
mulation of quantum dissipative systems to be given in terms of quantum sto
chastic calculus. This treatment allows for a physically meaningful treatme
nt of both constant and nonlinear dissipation. As an application, we quanti
ze a mechanical system with the same nonlinear damping mechanism as the van
der Pol oscillator. (C) 1999 American Institute of Physics. [S0022-2488(99
)00206-6].