Summary text here
About ten years ago, Ferrari had a big ceremony to introduce the then new 360 Modena to North America. They brought along 400 actual horses (not sure if they were prancing or not) to represent each of the 360 Modena's 400 hp.
Ask a group of the most die-hard car enthusiasts you can find what the difference between horsepower and torque is and your likely to hear a litany of different explanations.
I find the easiest way to explain it is to use algebra. If you know the torque output of a motor (lb. ft.) and the amount of revs (rpm) at which the torque is applied, you can determine the horsepower by using this simple formula.
hp = (rpm x torque)/5252
Simply put, torque is a measure of force and revs are a measure of the speed at which torque is applied. Horsepower is a measure of work that incorporates the two.
So who came up with this measure? James Watt, who you may have heard has another unit of energy named after him, was marketing a steam engine to coal miners who had traditionally been using horses to lift coal out of mine shafts and needed a way to demonstrate what his engine was capable of in relation to a horse. Sparing you a bunch of math, Watt determined somewhat arbitrarily that a horse could do 33,000 lb. ft. of work every minute and that this was equal to one horsepower.
Now to answer the initial question of how much horsepower a horse has. I'll give you a hint: it's not one. The answer is 14.9 peak horsepower. So, if anyone from Ferrari reads this, if you would be so kind as to appease my obsessive tendencies and bring 37.7181208 horses to the North American 458 Italia launch in a few months it would be greatly appreciated.
This is the kind of stuff I sit around wondering about all day.