Using high resolution cosmological N-body simulations, we investigate the survival of dark matter satellites falling into larger haloes. Satellites preserve their identity for some time after merging. We compute their loss of mass, energy and angular momentum as dynamical friction, tidal forces and collisions with other satellites dissolve them. We also analyse the evolution of their internal structure. Satellites with less than a few per cent the mass of the main halo may survive for several billion years, whereas larger satellites rapidly sink into the center of the main halo potential well and lose their identity. Penetrating encounters between satellites are frequent and may lead to significant mass loss and disruption. Only a minor fraction of cluster mass (10 per cent on average) is bound to substructure at most redshifts of interest. We discuss the application of these results to the survival and extent of dark matter haloes associated with cluster galaxies, and to interactions between galaxies in clusters. We find that 35-40 per cent of galaxy dark matter haloes are disrupted by the present time. The fraction of satellites undergoing close encounters is similar to the fraction of interacting or merging galaxies in clusters at moderate redshift.