As Nicole said, there are four known dilute genes in horse coat colours. Some more about the way they work her....
First, the cream gene. Cream is responsible for turning chestnut to palomino, bay to buckskin, and less common colours such as cremello and perlino.
Cream is known as an 'incomplete dominant' - which means that if a horse has one copy of the gene, the coat is diluted, and two copies means it's diluted further. A bit like adding cream to coffee - and some, it gets pale. Add more, it gets paler still.
The gene works primarily on red pigment - if a horse carries two copies some effect will be seen on black, but a black with one cream gene often shows no real sign he's carrying it.
Chestnut with one cream gene gives palomino. These horses have a pale gold body colour and white or creamy white mane and tail. They have dark eyes and dark skin.
Chestnut with two cream genes gives cremello. This causes the eyes to be blue, the skin to be pink, an dbody and mane hair is a very pale cream - these horses can be so pale they're almost whit. Body colour will have a definite cream or off-white tinge if you look closely. This is the reason that palomino is a colour and not a breed - palominos will not breed true.
That means that breeding two palominos together gives a 50% chance of another palomino, a 25% chance of cremello, and a 25% chance of chestnut. Think of any breed - put a Welsh ppony on a Welsh pony, and you'll get another Welsh pony every time.... a breed breeds true. Palominos don't.
Bay with one cream gene gives buckskin. This colour is similar in some ways to golden dun - golden colour body with black mane tail and legs. There are important differences though - the body of a buckskin will be golden, whereas the golden dun tends to be a more faded shade. The legs of a pony with dun won't be truly black - just darker. A buckskin has black points. Duns always have a dorsal stripe - this can occur in other colours, including buckskin, but in a dun will be absolutely sharp, while other colours tend to have a blurry line that 'leaks' into coat colour. Duns also tend to have a darker mask on the face and upper legs, which a buckskin doesn't. Duns often have zebra striping - buckskins usually don't.
Bay with two cream genes gives a shade known as perlino - here the black points are faded too. Perlinos have the same pale cream body colour that cremellos do, but they have a darker shade of mane and tail - the hair here remains a darker, slightly orangey shade.
Black with one cream gene is known as smokey black - often they appear to be black, and the existence of their cream gene is known only when they inexplicably produce a palomino foal when put to a chestnut.
Black with two cream genes is known as smokey cream - these horses are really indistinguishable from cremellos and perlinos, and virtually impossible to identify.
Pic shows a palomino. Although his baby coat is very pale, there is no way he could be cremello - his eyes are dark, his skin is dark, and the darker colour round his muzzle and legs shows the colour he will most likely end up.
I've had people assure me he's a chestnut
