Horses are still as useless and unrealistic as they were in Oblivion.
Sure, horses fight alongside you and you're marginally faster travelling on a horse than if you're running without armor.

But seriously, any mounted warrior usually multiplies his combat value by several orders of magnitude when fighting from horseback ... but in Skyrim you actually have to dismount before entering combat.

It's entirely possible to make fun horseback combat, as Mount & Blade has demonstrated for years: Charge an enemy with your weapon drawn, pass him by closely, swing your axe and send the enemy flying ... in two directions.
Fire arrows while riding to keep out of melee range. Trample enemies under your mount's hooves.
And if the enemy reacts by peppering you with arrows: Well, you've got a shield and Bethesda has it's Horse Armor DLC probably locked and loaded.

See a short video on horseback combat in Mount & Blade: http://www.youtube.com/watch?v=8yN8SEAckb4

If you actually play it (demo downloads available), combat feels absolutely convincing ... your horse gathers speed, your view bobs up and down according to the gallopping rythm, you get a satisfying crunch if your weapon hits home and lancing an enemy feels so overpowering.
The combat feels actually a bit like fighting as a werewolf, if you're trying to fight groups of strong melee opponents by strafing and hitting them with power attacks.

Skyrim is awesome but I so hoped that Bethesda would have bothered to learn from Mount & Blade's shining example.

They would have to rebalance all combat and magic from top to bottom = too hard basket.

It's basically just a quick addition for the sake of improving fast travel. If you gave Beth the choice between fully implementing mounted combat and cutting out horses, they would take the latter.

both would be better, actually.
but i expect them to improve their game, not dragonage it.

I was thinking about this when I was playing! I thought "Wow, it's so annoying to get off of my horse and pull out my weapon to kill a wolf! I wish that I could just hit it from my horse!"

The world is too small for proper mounted combat.