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Baby Monsters
To shrink all monsters into babies with baby-like noises, enter the CHEAT MODE code then, while still on the title screen, press L2, L2, R1, R1, L1, R2, Select. You will now see a new option titled "Reduce" when you start the game.
Cheat Mode
At the Password screen enter Left, Up, X, Square, Down, Triangle, Square, Down. You can now enable infinite everything (lives, weapons, etc.), play as a monster, and choose your starting level.

Note: After entering this code you must start a new game to access the cheat menu.

One-Hit Kills
To cut any enemy in half with one hit, enter the CHEAT MODE code, then press L1, R1, L2, R2, Select.
Password Creation System
This document explains how to generate a Nightmare Creatures password to your specifications.  The NC password system keeps track of five different things using eight symbols (Triangle, O, X, Square, Up arrow, Down arrow, Left arrow, and Right arrow).  Using these symbols variously in the eight different password-screen slots gives a huge number of possible passwords, almost all of which are illegal.

First you need to decide on the following (it might be good to write these down):  Which character you want to play (Ignatius or Nadia), what level you want to start on (1-21), what difficulty level you want to play on (easy or hard), how many lives you want to have (1-31), and what weapon you want to use (1-4).

Next, you will have to do a few simple math problems (groan).  Most of these problems will ask you to do some simple operations (all the division is in remainder form), then just take the answer from each of the problems and run it through our handy little password decoder ring below: 

0=Triangle  1=O  2=X  3=Square  4=Up  5=Down  6=Left  7=Right

This will convert your useless string of eight numbers into a useful string of eight symbols.  Neat, huh? 

Slot 1:  (No math here)  Ignatius              Nadia
   Levels 1-8            Triangle                Up
   Levels 9-16               O                  Down
   Levels 17-21              X                  Left


Slot 2:  (Level#-1)/8     Enter the remainder


Slot 3:  #Lives/4     Drop the remainder


Slot 4:  #Lives/4     Multiply the remainder by 2.
                      Add 1 if your weapon is 3 or 4.


Slot 5:  (No math here)     Weapon# 1,3      Weapon# 2,4
          Easy difficulty    Triangle          O
          Hard difficulty     Up               Down


Slot 6:  (#Lives+Level#-2)/7     Enter the remainder


Slot 7:  (Level#+Weapon#-1)/7     Enter the remainder


Slot 8:  (#Lives+Weapon#-1)/7     Enter the remainder

Now I know that makes sense to me, but here is an example for the rest of you.

To start a game as Nadia, on level 13, with 21 lives, on easy difficulty, and using the level 3 weapon:

Slot 1:  The symbol for Nadia on level 13 is Down-arrow.  That was easy...

Slot 2:  13-1 is 12, divided by eight is 1 remainder 4.  Putting the remainder through the nifty decoder ring, I get Up-arrow.

Slot 3:  21/4 is 5 remainder 1.  I drop the remainder and put 5 through the system.  Presto!  I get Down-arrow.

Slot 4:  21/4 is still 5 remainder 1.  This time I take the remainder and double it for a grand total of 2.  Except now I have to add 1 because we are using weapon# 3.  As the chart says, 3=Square.

Slot 5:  Another simple one.  Easy difficulty with weapon# 3 is Triangle.

Slot 6:  21+13-2 equals 32.  Dividing by 7 gets me 4 remainder 4.  Intuition tells me that 4=Up-arrow.

Slot 7:  13+3-1 equals 15.  Again dividing by that magic number 7, I come up with 2 remainder 1.  The not-so-magic number 1 equals O.

Slot 8:  21+3-1 equals 23.  23/7 equals 3 remainder 2.  2=X.

Thus the code for the aforementioned game is (Drum roll please):  Down, Up, Down, Square, Triangle, Up, O, X.  Putting this code in to my game I see that It does in fact work.  Nadia is going to kick some ass in the London Zoo.

Credits:

Chris Canfield: Codebreaking, Logic, The ability to think in base 7, 8, 2, and 4, and the inability to add 11 and 9 while doing so.

David Ruth: Hours of mindless gameplay to gain slight variants on each password.

Passwords 
Level  Password
2      Triangle, Circle, Circle, Triangle, Triangle, Up, X, Up
3      Triangle, X, Circle, Up, Triangle, Triangle, Square, Left
4      Triangle, Square, Circle, Up, Triangle, Circle, Up, Left
5      Triangle, Up, Circle, Up, Triangle, X, Down, Left
6      Triangle, Down, Circle, X, Triangle, X, Left, Down
7      Triangle, Left, Circle, Left, Triangle, Down, Triangle, Triangle
8      Triangle, Right, Circle, Up, Triangle, Down, Circle, Left
9      Circle, Triangle, Circle, Triangle, Circle, Up, Square, Down
10     Circle, Circle, Circle, X, Circle, Left, Up, Left
11     Circle, X, Circle, Up, Circle, Circle, Down, Triangle
12     Circle, Square, Triangle, Up,Circle, Down, Left, Square
13     Circle, Up, Triangle, X, Circle, Down, Triangle, X
14     Circle, Down, Triangle, Up, Circle, Triangle, Circle, Square
15     Circle, Left, Triangle, Down, Triangle, Circle, Square, Up
16     Circle, Right, Triangle, Square, Triangle, Circle, Up, Square
17     X, Triangle, Triangle, Square, Triangle, X, Down, Square
18     X, Circle, Triangle, Square, Triangle, Square, Left, Square
19     X, X, Triangle, Down, Triangle, Down, Triangle, Up
20     X, Square, Triangle, Square, Triangle, Down, Circle, Square
Snake Boss
When you enter the room with the fire breathing snake you will see five columns around the snake pool. Slash those colums with your sword or staff and knock them onto the snake. For best results, use L1 or R1 to move to the next column, then hack away. If you're quick enough the snake won't get a chance to breathe fire.

After all of the columns fall, the fire will stop and the snake will start biting at you. Dodge him when he strikes by pressing L1 or R1. When he starts to swing around the pool strike him in the head. Do this four or five times and he's dead!