Loki is the trickster god of Norse mythology. According to the D'Aulaires' book of Norse myth:
Loki is Odin's jotun (frost giant) blood-brother. He had two wives , Sigunn in Asgard and in Jotunheim Angerboda, the mother of his three monstous offspring, Hel, Fenris, and the Midgard's Serpent. He was also the mother of Sleipnir (Odin's eight-legged horse). A personification of two aspects of fire, he suggested both the destructive conflagration and the helpful, warming flame.
Loki is a changeable character, sometimes acting to help the Norse gods, but more often scheming against them. With his clever, quick wit and flexible ethics, he is reminiscent of Hermes/Mercury in the Greek/Roman pantheon.
He is fertile and powerful, yet also androgynous. Interestingly, the only thing that Loki fears is that ultimate symbol of masculinity, the hammer of Thor.
Here is the story about how Odin's horse was literally borne by Loki (lifted from Wiki):
Thor, the Giant-Slayer, was away from Asgard slaying giants in the north, when a frost giant disguised as a human stonemason appeared, offering to rebuild the wall all around Asgard in exchange for the sun, the moon, and fair Freyja. The gods agreed, thinking that it would be good, since part of the wall was crumbling, and also believing the giant would never be able to complete it in the agreed upon six month time frame. The giant asked one thing: the use of his gray stallion, Svadilfari (literally, "slave", or possibly "ill-fated"). Loki quickly agreed before any of the other gods could reply. The work began. Using the stallion, the giant began building the wall, and would have received the sun, the moon, and Freyja. The gods, seeing this, became furious at Loki, and said if they lost the sun, the moon, and Freyja, they would torture Loki eternally (which happened later anyway). Then, as Svadilfari was dragging the final brick to complete the wall back to Asgard, Loki transformed into a beautiful white mare, and led the stallion away, angering the giant. When the giant began tearing down the wall, Thor appeared and smashed the giant on the head with his hammer. Loki later gave birth to Sleipnir, the eight-legged steed of Odin, the offspring of the gray stallion Svadilfari and Loki when "he" was the beautiful white mare.
Despite this kind of willingness to take one for the team for the Asgard gods, Loki eventually goes against them, and engineers the death of the gentle Balder, the god of light and peace.
Balder was having bad dreams. His father, the mighty Odin, consulted an oracle to determine their cause. The oracle said, "Balder's days are numbered. Hel has already prepared a seat for him in her dark abode." Odin went home and gave the sad news to the other gods.
But Balder's mother Frigg would not rest until she had gone out into the world and taken a vow from every animal, vegetable, and mineral that it would not hurt her son. The olny thing that she did not get a vow from was the mistletoe, for it was so small and innocent, whom could it hurt? Loki watched jealously as all the gods gathered around Balder and made a game of testing his invulnerability, pelting him with stones and spears, and arrows, and watching them all sink harmlessly to the ground. Loki took the form of an old crone and weaseled the secret of the mistletoe out of Frigg. Then he fashioned an arrow tipped with the little plant.
He approached Balder's blind brother Hod, gave him the arrow, and told him to shoot. Hod did, and Balder died. Balder's wife Nanna was heartbroken to learn of her husband's death, and she died when she heard of it.
One of Balder's brothers, the brave Hermod, travelled to the underworld to save his brother. After many trials, he convinced Hel to send Balder back. But Hel had one condition, "Every thing on earth must weep for Balder. Then I will send him back."
Hermod did not think this would be a problem, for Balder was universally adored and mourned. Frigg sent messengers to ask everything on earth to cry her son out of Hel's hands. And indeed everything on earth wept -- men and women, beasts and birds, even the stones and rivers -- except for one hard old woman named Thokk. She refused to shed a single tear, for she said that Balder had never done anything for her. Thokk was Loki in disguise.
And so Balder remained in the underworld, and Hod was killed in revenge for his death. The truly guilty party remained free for many years. But eventually, the gods found out, when Loki boasted of it.
When I heard about Loki's punishment as a kid, I was horrified. It's probably less horrifying than what happened to Prometheus, but only slightly. From the D'Aulaires:
Now the Aesir showed no mercy. They squeezed Loki back into his true shape and took him to a dark and dismal cave. They placed him across three sharp ledges, bound him securely, and hung a poisonous serpent over his head so that its venom dripped down into his face. There they left Loki to lie and suffer.
Sigunn, his loyal wife, stood by him and tried to ease his pain. She would catch the venom in a cup, but when the cup was full, she had to empty it. Then the poison dripping on Loki's face made him squirm and tear so hard at his fetters that the whole world trembled. Men on Midgard would pray to be saved from the earthquake, but on Asgard, the Aesir would think of Balder and turn away with grim faces.