  We present results from high-resolution N-Body/SPH simulations of
rotationally supported dwarf irregular galaxies moving on bound orbits in the
massive dark matter halo of the Milky Way.The dwarf models span a range in disk
surface density and the masses and sizes of their dark halos are consistent
with the predictions of cold dark matter cosmogonies. We show that the strong
tidal field of the Milky Way determines severe mass loss in their halos and
disks and induces bar and bending instabilities that transform low surface
brightness dwarfs (LSBs) into dwarf spheroidals (dSphs) and high surface
brightness dwarfs (HSBs) into dwarf ellipticals (dEs) in less than 10 Gyr. The
final central velocity dispersions of the remnants are in the range 8-30 km/s
and their final $v/\sigma$ falls to values $< 0.5$, matching well the
kinematics of early-type dwarfs. The transformation requires the orbital time
of the dwarf to be $\simlt 3-4$ Gyr, which implies a halo as massive and
extended as predicted by hierarchical models of galaxy formation to explain the
origin of even the farthest dSph satellites of the Milky Way, Leo I and Leo II.
Only dwarfs with central dark matter densities as high as those of Draco and
Ursa Minor can survive for 10 Gyr in the proximity of the Milky Way: this is
naturally achieved within hierarchical models, where the densest objects should
have small orbital times due to their early formation epochs. Part of the gas
is stripped and part is funneled to the center due to the bar, generating one
strong burst of star formation in HSBs and smaller, multiple bursts in LSBs.
Extended low-surface brightness stellar and gaseous streams originate from LSBs
and, when projected along the line of sight, can lead to overestimate the
mass-to-light ratio of the bound remnant by a factor $\simlt 2$,
