I have seen composting of horse waste actively done on several farms I visit.  Composting has several benefits discussed here, with pictures of some setups on a few farms.

Many horse owners like to turn their horse waste into fertilizer.  Composting is a procedure where fresh manure can remain in a contained area. With the addition of air through pipes, the bacteria digest the waste into other organic matter that is good for the soil.  This composting material is turned over and/or moved to another container twice to ensure complete digestion by the bacteria. 

I am not an expert in this, nor am I a gardener.  You will need to look for other material on how to do this.  Included here are some images of setups I have seen on farms.  There are other setups, but this will get your ideas started.  I have heard in my travels that the bedding type makes a difference, with wheat straw being the best.  I would also think that feeding grain would affect the final product.  I know it affects the health of the horse.

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