However, I really like the fact that horses get +2 movement and wargs only get +1. The balancing needs to happen in the other stats. Wargs should be combat oriented, with + dodge and +attack; enough to tempt you to take warg over that +2 movement bonus.
I agree with what your saying here. The utility vs attack of horses and wargs should be apparent.
On a more general note, I don't get why people are calling for mounted nerfs, when the better approach would be to make being unmounted desirable in certain situations. Heavenfall's mod has a pretty decent blueprint for doing this, and while I don't know if he specifically has bonuses to mounted units vs unmounted, that would be a good start to balancing them out. Your enemies using horse-mounted armies? Counter them with pikes, which deal double damage against horses if the wielder is not mounted. Make some traits only useable by unmounted units.
I would say that, while the prone avoidance makes sense and I like the direction you are taking with having some situations be better for mounted vs non-mounted units.
However, the reason I believe horses movement should be reduced (or made harder to access, etc farther tech, more costly..) is pretty clearly stated by the author:
"Movement is arguably the best property in game, +2 move essentially gives you +100% exp compared to a normal unit because you can fight twice as often (at least if you have the master scout ability). In reality though it is even more +exp because you will get to monster spawns faster and clear them out before your opponents even get there. Having 4 move also gives you unlimited kiting abilities vs 2-move monster in tactical battles and gives you the opportunity to attack 3 and 4-move monsters first."
When it is possible to get a horse early in the game your hero/sovereign can advance significantly faster and reach/clear areas for settlement considerably faster than if he did not have a horse.
Say I spawn with a horse resource 2 squares from where I found my civilization. By the time I have upgraded to a town and have a monument, (say season 70) I have the opportunity to build a horse pasture. At which point my hero can immediately purchase a horse, assuming he is moving in a small army, or with high mobility minions he will go from 2 -> 4 movement (assuming it took me 10 turns to get my hero back to my town and get all this done). Starting at turn 80 I will be moving at twice the rate, by turn 120, I will of covered 80 squares compared to 40. Assuming some of those are wasted and I do not have roads, I would still be roughly 30% farther than if I had not invested in that horse 40 turns ago.
It has nothing to do with the prone, nothing to do with the weight capacity, or even the initiative, the +2 movement makes a world of difference (the other stats are awesome though).
Compare that idea to a game that has 220 turns invested, assuming the AI has not gotten horses all game.... which they do generally seem to manage that. By this time you have moved a whopping 280 more squares (per champion) than the AI. Assuming you have 3-4 heroes and they come in at different times you still get 280 (100% of the time for the sov), 210 (75% of the time for your first hero), 140 (50% of the time for your third hero), 84 (and 30% of that time for that level 9 hero). You would be roughly 714 squares ahead of the AI. You don't even need to be good at that point, just because you have explored that much more and leveled so much more you will win.