Well, I don't want a "realistic" inventory. Just not completely wacked out either. I like the idea of a horse being able to offload some of my encumbrance. Not realistic of course, but I'd like any horse, wagon, or companion to be marked on the map. If the horse dies, at least you can find the loot. A died horse or companion should place a "user marker" on the map (we should be able to place as many as we want), which we can delete when we feel for it.
But you should be able to buy upgrades for the horse:
* Expanded saddle bags - upgrades from 50 lbs to 200 lbs worth of equipment. Doesn't slow down the horse.
* Double saddles - allows you to have a secondary companion on the same horse. Only 50 lbs in the normal bags, also no slowdown. Companion can carry stuff too.
* Wagon mount - allows you to connect a wagon/cart to the horse, which carries 300 lbs to 500 lbs of equipment. Companion can't ride with you, and also slows down horse.
So you choose what kind of upgrade you want to have (not all at the same time), forcing the player to make a choice on what suits him best. Allows different play styles. The above is just the outline of an idea, take everything with a pint of salt