can't tell you what they do in quarantine and how long they stay there. guess that's up to the individual anti virus software.
However i can answer your question about what happens to files when they are erased from the recycle bin.
What happens is that the files physical address on the harddrive is marked as free space. The data is still on there, but it can quickly be replaced with other files. When the sector (the address i was talking about) has been rewritten, the previously data on that sector are lost.
a sector is a physical address on the HDD that holds 512 bytes. most files uses more sectors sense they usually are bigger then 512 bytes.
So if a file holds 5 sectors and only 1 of the sector has been rewritten, the previous data are now damage. It will require some Pro software and/or a professional to restore it at this point.