  Observations of multiple-image gravitational lens systems suggest that the
projected mass distributions of galaxy haloes may contain substantial
inhomogeneities. The fraction of the halo mass in dense substructure is still
highly uncertain, but could be as large as a few percent. While halo
substructure is seen in numerical simulations of CDM haloes, little of this
substructure survives in the innermost regions of haloes, and thus the
observational claims for substructure at small projected radii are slightly
surprising. There is evidence, however, that even the highest-resolution
simulations published to-date are still limited by numerical effects that heat
and disrupt substructure artificially in high-density regions. By comparing
numerical and semi-analytic models of halo substructure, we show that current
simulations probably underestimate the mass fraction in substructure at small
projected radii, by a factor of at least 2-3. We discuss the prospects for
using lensing observations as a fundamental test of the nature of dark matter.
