As far as I know, the horse will remember the puff into the noise with the movement it does biting. I.e. When it goes to bite, it will remember the feeling and if she/he doesn't like the feeling, it won't bite. I don't know if this is explanatory :)
I heard that kicking the horse in front of the shin (not like violently, but softly. It doesn't hurt a horse much) when it's about to bite works, because every time it's going to bite, it will remember the kicks, look down and won't bite.
Totally explanatory. :) I'd never heard the kicks in the shin thing, and never tried it because when he did nip I didn't want to move my feet at all, was trying to be totally unaffected so he didn't think he was riling me up, if that makes any sense.
For Jojo, the other horse my daughter rides, the bottle doesn't affect him at all, so we are starting all over.