The effect of baryons on cosmic structures is investigated
combining high-resolution controlled N-body experiments with
cosmological gasdynamical simulations of galaxies and galaxy clusters in
the LCDM cosmology. In particular, I will discuss the vital role of
baryons for crucial issues including the fate of supermassive black holes
and the evolution of the M(BH)-sigma relation in binary galaxy mergers,
the structural evolution of substructure in CDM models, and the shapes of
dark matter halos.