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Digital signal processing (DSP) combined with a phase and polarization diverse coherent receiver is a promising technology for future optical networks. Not only can the DSP be used to remove the need for dynamic polarization control, but also it may be utilized to compensate for nonlinear and linear transmission impairments. In this paper we present results of a 42.8Gbit/s nonlinear transmission experiment, using polarization multiplexed QPSK data at 10.7GBaud, with 4 bits per symbol. The digital coherent receiver allows 107,424 ps/nm of chromatic dispersion to be compensated digitally after transmission over 6400km of standard single mode fiber.