The main problem that is solved in this paper has the following simple formulation (which is not used in its solution). The group $K = \mathrm{O}_p ({\bf C}) \times \mathrm{O}_q ({\bf C})$ acts on the space $M_{p,q}$ of $p\times q$ complex matrices by $(a,b) \cdot x = axb^{-1}$, and so does its identity component $K^0 = \SO_p ({\bf C}) \times \SO_q ({\bf C})$. A $K$-orbit (or $K^0$-orbit) in $M_{p,q}$ is said to be nilpotent if its closure contains the zero matrix. The closure, $\overline{\mathcal{O}}$, of a nilpotent $K$-orbit (resp.\ $K^0$-orbit) ${\mathcal{O}}$ in $M_{p,q}$ is a union of ${\mathcal{O}}$ and some nilpotent $K$-orbits (resp.\ $K^0$-orbits) of smaller dimensions. The description of the closure of nilpotent $K$-orbits has been known for some time, but not so for the nilpotent $K^0$-orbits. A conjecture describing the closure of nilpotent $K^0$-orbits was proposed in \cite{DLS} and verified when $\min(p,q) \le 7$. In this paper we prove the conjecture. The proof is based on a study of two prehomogeneous vector spaces attached to $\mathcal{O}$ and determination of the basic relative invariants of these spaces. The above problem is equivalent to the problem of describing the closure of nilpotent orbits in the real Lie algebra $\mathfrak{so} (p,q)$ under the adjoint action of the identity component of the real orthogonal group $\mathrm{O}(p,q)$.

We extend the basic theory of Lie algebras of affine algebraic groups to the case of pro-affine algebraic groups over an algebraically closed field $K$ of characteristic 0. However, some modifications are needed in some extensions. So we introduce the pro-discrete topology on the Lie algebra $\mathcal{L}(G)$ of the pro-affine algebraic group $G$ over $K$, which is discrete in the finite-dimensional case and linearly compact in general. As an example, if $L$ is any sub Lie algebra of $\mathcal{L}(G)$, we show that the closure of $[L,L]$ in $\mathcal{L}(G)$ is algebraic in $\mathcal{L}(G)$. We also discuss the Hopf algebra of representative functions $H(L)$ of a residually finite dimensional Lie algebra $L$. As an example, we show that if $L$ is a sub Lie algebra of $\mathcal{L}(G)$ and $G$ is connected, then the canonical Hopf algebra morphism from $K[G]$ into $H(L)$ is injective if and only if $L$ is algebraically dense in $\mathcal{L}(G)$.

The notion of decompositon class in a semisimple Lie algebra is a common generalization of nilpotent orbits and the set of regular semisimple elements. We prove that the closure of a decomposition class has many properties in common with nilpotent varieties, \eg, its normalization has rational singularities. The famous Grothendieck simultaneous resolution is related to the decomposition class of regular semisimple elements. We study the properties of the analogous commutative diagrams associated to an arbitrary decomposition class.