I just had a bit of a trawl through my ancient copy of Encyclopedia Britannica (remember when they were books not CDs?) and they seem pretty keen on the notion that horse cavalry did indeed morph into armoured units. They are a bit vague about the specifics for particular regiments though.
But they did quote some interesting facts. E.g. Tanks got that name because part of an early secret prototype was officially described as a water carrier at the workshop where it was built. This was converted to that tank thing, a term that stuck. Also tanks have many naval terms, even today, such as hull, turret, deck, etc because much of the initial development was carried out (in early World War I, against general war office support) under the umbrella of the British Navy. Their first Lord of the Admiralty at the time, who saw their potential, was Winston Churchill (more famous of course in the next war).
As far as horse mounted cavalry was concerned, it seems that there were still several hundred thousand of them of them around in World War 1 (rifle equipped), despite their big weakness being their vulnerability to the horses being killed or wounded. The Russians are quoted as having 24 divisions (200,000 horsemen) which they later increased to 54 divisions. According to E.B., this huge force didnt achieve much except clogging up their transport system with the movement of horse food! Understandably, horse cavalry were described as being little used in World War 1, despite their availability, but some successful examples of their use were related.
Even in the days of archers horse were said to have been hard to armour effectively. Dismayed by having their horses slaughtered by English archers at Crecy in 1346, the French knights apparently dismounted and fought on foot at the battle of Poitiers some years later.
Astonishingly, Russia still had 39 horse mounted divisions in World War 2, which they kept for use in particularly difficult terrain. Even the USA is said to have used one mounted regiment in the early stages of World War 2 as part of an unsuccessful defence of the Philippines.
The tactics of cavalry did not die completely however, and were credited as having parallels in the many speedy uses of armoured vehicles. One mentioned was the German Blitzkrieg tactics of World War 2 in which speed and mobility were key factors. As Exocet mentions, even Osama Bin Laden and some of the troops there were recently reported as favouring horses to nip round Afghanistan, so use of the horse in warfare lingered for quite a while, and did continue parallel to the development of tanks for a lot longer than one might have thought.
Happy tanking/horsing whichever viewpoint you favour.
