Can coconut cream be transformed into coconut milk, or the other way around? For example, will adding water or cow milk to coconut cream make a usable coconut milk? Or by reducing coconut milk, can I get coconut cream?
Short answer: you can let coconut milk separate and skim it to get a little coconut cream, but can't convert coconut cream back to coconut milk. Diluting the cream just produces something runny and disgusting.
Long answer: Coconut milk is made by grating coconut and running very hot water through it to extract oils and flavor, then straining out the coconut pieces. It is a mix of water soluble parts and fats, and can emulsify just like normal milk or thicken sauces similarly to milk cream.
If you allow coconut milk to sit, the fatty part will rise to the top. This part is skimmed off to make coconut cream, which is much richer in fats. It cooks very differently because of the higher fat content, and does not emulsify or thicken well; however it is quite delicious!
If you're looking to substitute for coconut milk, but only have coconut cream, the best substitution will probably be a little coconut cream + a lot of heavy (milk) cream.
Note: Some people refer to the liquid contained in fresh coconuts as coconut milk, but it is more accurately called coconut water. This confusion has ruined many a recipe!
The coconut milk is refrigerated and allowed to set. Coconut cream is the thick non-liquid part that separates and rises to the top of the coconut milk.
To get the other way you can surely add milk or water. This will not give you the same exact thing as coconut milk, but it would be ok as a substitution for a dish.
Yes you can refer to http://www.wikihow.com/Make-Coconut-Milk-from-Coconut-Cream I did this and it worked just fine for my recipe.