  We outline a scenario of galaxy formation in which the gas in galaxy-forming
regions was preheated to high entropy by vigorous energy feedback associated
with the formation of stars in old ellipticals and bulges and with AGN
activity. Such preheating likely occurred at redshifts z ~ 2-3, and can produce
the entropy excess observed today in low-mass clusters of galaxies without
destroying the bulk of the Lyman alpha forest. Subsequent galaxy formation is
affected by the preheating, because the gas no longer follows the dark matter
on galaxy scales. The hot gas around galaxy haloes has very shallow profiles
and emits only weakly in the X-ray. Cooling in a preheated halo is not
inside-out, because the cooling efficiency does not change significantly with
radius. Only part of the gas in a protogalaxy region can cool and be accreted
into the final galaxy halo. The accreted gas is likely in diffuse clouds and so
does not lose angular momentum to the dark matter. Cluster ellipticals are
produced by mergers of stellar systems formed prior to the preheating, while
large galaxy disks form in low-density environments where gas accretion can
continue to the present time.
