  We present a pair of high-resolution smoothed particle hydrodynamics (SPH)
simulations that explore the evolution and cooling behavior of hot gas around
Milky-Way size galaxies. The simulations contain the same total baryonic mass
and are identical other than their initial gas density distributions. The first
is initialised with a low entropy hot gas halo that traces the cuspy profile of
the dark matter, and the second is initialised with a high-entropy hot halo
with a cored density profile as might be expected in models with pre-heating
feedback. Galaxy formation proceeds in dramatically different fashion depending
on the initial setup. While the low-entropy halo cools rapidly, primarily from
the central region, the high-entropy halo is quasi-stable for ~4 Gyr and
eventually cools via the fragmentation and infall of clouds from ~100 kpc
distances. The low-entropy halo's X-ray surface brightness is ~100 times
brighter than current limits and the resultant disc galaxy contains more than
half of the system's baryons. The high-entropy halo has an X-ray brightness
that is in line with observations, an extended distribution of
pressure-confined clouds reminiscent of observed populations, and a final disc
galaxy that has half the mass and ~50% more specific angular momentum than the
disc formed in the low-entropy simulation. The final high-entropy system
retains the majority of its baryons in a low-density hot halo. The hot halo
harbours a trace population of cool, mostly ionised, pressure-confined clouds
that contain ~10% of the halo's baryons after 10 Gyr of cooling. The covering
fraction for HI and MgII absorption clouds in the high-entropy halo is ~0.4 and
~0.6, respectively, although most of the mass that fuels disc growth is
ionised, and hence would be under counted in HI surveys.
