I haven't noticed this, but keep in mind that the client determines the level of detail (LOD) distance on criteria like number of toons in an area. To preserve memory, lower-res textures only get replaced with higher resolution ones depending on distance, and that distance might change dynamically. There might even be some mechanism at work that weighs the texture quality to be displayed on certain assets depending on the type of asset. Horses might not rank very high in that. This game is build around the idea of having posses of hundreds prancing around on their noble steeds in Cyrodiil.

Try getting very close to the horse, stay there for a while, and see whether the textures change. Try doing the same in a less populated area.

Also, I remember reading somewhere on these forums that some "hidden" graphical settings only get set by changing the overall graphics quality, i.e. some effects, for which no separate option exists, are only shown on high or ultra. E.g. if you start with your overall graphics quality on medium and then manually change the individual settings to high or ultra (so graphics quality becomes "custom"), some effects won't be triggered. I'll see if I can find that post again.

So, try to reset your graphics quality to "ultra", turn everything on except VSYNC, and see whether horses look better. I'll look for myself tomorrow and take some screenshots for comparison.

I have noticed this with horses too, even my own horse. I wish they were as high res as the ones standing around at the stables.

I think we're witnessing the reality that the game was made for 3rd person perspective but first person was added because old school fans wanted it. IMHO I don't think 1st person suits an MMO, unless you want to die constantly.

But the game was not designed from the get go to be 1st person. How can it be if everything that is aggressive to the player has visual cues on the ground as to avoid them? In 1st person you can't see the cone or rectangle from many attacks. You have to guess were the flames are going to drop from fire casters.

I've noticed that the textures on hrrses are really poor as well relative to the rest of the game world. From what I can tell of the screenshots posted about the new 'higher res' textures they'll be adding, they look the same as the current ones honestly. The low resolution is really only bothersome on the head of the horse, for me at least. The bridle, eyes and markings are extremely ... meh. They aren't even of the same quality as vanilla Skyrim horses or EVEN Vanilla Oblivion horses! I really hope to see a higher resolution for horses in the future, given that they seem to be putting a bit of an emphasis on them with the adding of horse racing and suchlike.

I agree with the OP - my horse looks really ugly in comparison to my char, even when noone else is around. Even in old EQ2, the horses looked more detailed and never that washed out.