In this paper we provide a comprehensive review of our recent work on the nonlinear interaction between high intensity pulsed laser beams and transparent solids. New experimental techniques used to measure multiphoton absorption and energy deposition in wide-gap alkali halides in the prebreakdown regime have led to hard evidence refuting the avalanche model of laser-induced damage at visible laser wavelengths. These measurements, performed in specially purified materials, have allowed the discovery of the roles of laser-induced excitations in energy absorption, leading to the conclusion that virtually all lattice heating occurs via a nonlinear absorption of laser photons by multi-photon-excited free electrons. These results yield an experimentally confirmed theoretical definition of intrinsic, single pulse laser damage thresholds at 532 nm wavelength in three- and four-photon bandgap alkali halides. Extending this work to multipulse effects in the subthreshold intensity regime, we have formulated a new model of bulk damage based on thermomechanical stress induced by accumulation of multiphoton-generated lattice defects.