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The Elder Scrolls V: Skyrim Hints
Return to Louis Letrush.
1 of 6: Ride Frost over to where the quest arrow marks Letrush's current location. (Note that it's near Fallowstone Cave, so fast-travel there if you've already discovered it.)
2 of 6: Letrush may be under attack by wolves or spiders when you arrive. If so, dismount and help him kill them.
3 of 6: Talk to him after the combat is over. If he says he doesn't see Frost, then get back on Frost and ride him over to where he's right next to Letrush, then dismount and talk to Letrush again.
4 of 6: You'll have three dialogue options to choose from. The first one gets you some gold, after which Letrush runs off without Frost for some reason. That doesn't mean Frost is yours, though -- he'll still count as stolen, and he won't follow you around when you fast-travel.
5 of 6: If you want to make Frost your horse, you'll have to pass a persuade check when you talk to Letrush, or use the third dialogue option. It'll supposedly start a combat with Letrush, but due to a glitch, he may just run away without turning hostile.
6 of 6: The advantage to passing the persuade option is that you'll get the horse and the gold (and some Speech skill practice), but the disadvantage is that a thug sent by Letrush will attack you in a random world encounter sometime later on. The advantage of using the third option is that you don't have to pass a persuade check, but the disadvantage is that you don't get the gold (unless you attack and kill Letrush, or pickpocket him).