I've never heard of them being used for horses, however my sister shows dogs and as I understand it from her, some not-so-reputable show dog owners will have their dog neutered and have the falsies used so that they appear to be intact.
According to my sister, it is usually done when the owner can not handle their aggressive males when in a show ring with females in heat.
OMG!!!! That is just the most ridiculous thing I have ever seen. That has to be a joke right? "Helps the animal retain his self esteem" HA! I have never had an animal get depressed and mopey "Oh, I'm not a real man anymore!! BOOHOO!!" LOL. Spyder, that second post about the horse attack was priceless. No doubt that guy got just what he deserved. ;p