More common in dogs, patellar luxation is when the kneecap - which in horses is the stifle joint - isn't located quite where it's supposed to be.
In equines, it's caused by a recessive gene that's most common in Shetlands and miniature horses (probably coming from the Shetlands, as they're often used to breed miniatures). The symptoms are an unwillingness to flex the stifle and stiffness in the rear, sometimes to the point of the foal crouching.
The prognosis, even with surgery, is poor - affected foals seldom have an athletic career and some people may have them euthanized. (Although given the small size of most of the affected animals, a good proportion end up as pets).