  We use high resolution simulations to study the formation and distribution of
galaxies within a cluster which forms hierarchically. We follow both dark
matter and baryonic gas which is subject to thermal pressure, shocks and
radiative cooling. Galaxy formation is identified with the dissipative collapse
of the gas into cold, compact knots. We examine two extreme representations of
galaxies during subsequent cluster evolution --- one purely gaseous and the
other purely stellar. The results are quite sensitive to this choice.
Gas-galaxies merge efficiently with a dominant central object while
star-galaxies merge less frequently. Thus, simulations in which galaxies remain
gaseous appear to suffer an ``overmerging'' problem, but this problem is much
less severe if the gas is allowed to turn into stars. We compare the kinematics
of the galaxy population in these two representations to that of dark halos and
of the underlying dark matter distribution. Galaxies in the stellar
representation are positively biased (\ie over-represented in the cluster) both
by number and by mass fraction. Both representations predict the galaxies to be
more centrally concentrated than the dark matter, whereas the dark halo
population is more extended. A modest velocity bias also exists in both
representations, with the largest effect, $\sigma_{gal}/\sigma_{DM} \simeq
0.7$, found for the more massive star-galaxies. Phase diagrams show that the
galaxy population has a substantial net inflow in the gas representation, while
in the stellar case it is roughly in hydrostatic equilibrium. Virial mass
estimators can underestimate the true cluster mass by up to a factor of 5. The
discrepancy is largest if only the most massive galaxies are used, reflecting
significant mass segregation.
