There are some federal holidays between now and Election Day (i.e, Fourth of July, Labor Day, Columbus Day), and Congress will take those days off. Congress also recesses toward the end of the year, but I think that's after the election, which is the first Tuesday in November.

to go home and campaign to retain their own jobs.

they keep their jobs until someone else is sworn in

So they continue as normal until the new Congress is sworn in. Thus the whole concept of the "Lame Duck" session. ie, outgoing congresspeople voting for legislation that the incoming congresspeople probably wouldn't vote for.

In the U.S. House: representatives serve for two years (all house representatives are up for re-election every two years)

In the U.S. Senate: senators serve for 6 years (only one-third of the senators are up for re-election at a time - 1/3 in 2012, 1/3 in 2014, 1/3 in 2016 and so on)

Even though the elections will be held in November 2012, the current Congresspersons hold their seats until any new folks are sworn in the first week of January 2013.

So, to answer your question The House and The Senate do NOT dissolve before or even after election day. The first week of January 2013 the next session of Congress will begin and that will be the 'date' of the first day that any newly elected office holders will begin their term of office.

I hope I typed that out clearly and that it makes sense

Since the Bush tax cuts expire and defense cuts kick in this January, Congress has to act before January. Most expect that Congress will reconvene after the November election and try to deal with this before a new Congress is reconvened in January. Should be very chaotic and many things will be inserted into those bills that almost no one knows about. We'll be dealing with the repercussions of this for years.

Generally this involves the party in control doing whatever they can to embarrass the incumbent party in the White House and the lame duck part to stall if their party loses or pass even more ridiculous legislation if they win.

During election season they do nothing and raise money for themselves.