We study the oscillations and conversions of relativistic neutrinos propagating in matter of variable density using the wave packet formalism. We show how the oscillation and coherence lengths are modified in comparison with the case of oscillations in vacuum. Secondly, we demonstrate how the equation of motion for two neutrino flavors can be formally solved for almost arbitrary density profile. We calculate finally how the use of wave packets alters the nonadiabatic level crossing probabilities. For the most common physical environments the corrections due to the width of the wave packet do not lead to observable effects.Recent experimental discoveries [1] seem to suggest that neutrino oscillations [2,3,4,5] really exist. Since the observation of neutrino oscillation may provide valuable information on the basic properties of neutrinos, e.g. masses and mixing angles, it is important to know the underlying physics also on the conceptual level.It was pointed out e.g. in Refs.[6] and [7] that the standard quantum mechanical treatment of neutrino oscillations using plane waves [5,8] is not completely satisfactory for many reasons. The wave packet approach [6],[9]-[15] provides a more physical picture which is particularly adapted for describing phenomena localized in space and time. This formalism also elegantly accounts for the loss of coherence by the separation of wave packets. However, some authors (e.g. [7,16,17]) have been skeptical about the use of wave packets, and Refs. [17,18] conclude that the concept of wave packet is unnecessary for all the relevant physical cases. A bunch of other methods has also been discussed [7,16,17,19,20] (to name a few).In this paper we will consider neutrino oscillations and other phenomena in matter. We have decided to use wave packets because the calculations of the kind presented here have never been carried out before.We will first focus on the equation of motion for neutrinos propagating in matter of variable density. Generally the equation is modified in matter due to coherent forward scatterings [21,22,23,24], and an exact solution can be found only for few special cases. Here we address one special case where the density of matter changes slowly enough, so that the situation is said to be adiabatic. Now the eigensolutions for the equation of motion are found trivially, for arbitrary number of relativistic neutrinos. To describe neutrino oscillations in matter, we apply the method of Ref. [14] in connection with these solutions. We can express the results formally using effective oscillation and coherence lengths which are not local quantities anymore.Generally neutrinos may propagate nonadiabatically, and solving the complete equation of motion even for two neutrino flavors is usually far from trivial (see e.g. [25,26,27] for two specific density profiles). In this paper we show that the solution for "arbitrary" density profile can be constructed by using infinite integral series. Some supplementary calculations which may be of formal interest are enclosed in Appendix B...