"The mutated gene alters neural crest cell migration or survival, which affects the progenitor cells for melanocytes and intestinal ganglia. Affected foals suffer from aganglionosis of the submucosal and myenteric ganglia of the distal part of the small intestine and of the large intestine, resulting in intestinal immotility and colic" (Lightbody 2002). According to genetic research conducted through the Minnesota Paint Horse Association, it was found that of 100 horses that produced lethal white syndrome foals, all OLWS (Overo Lethal White Syndrome) foals had two lethal alleles, their parents had a normal and a lethal allele, and control group of solid-colored horses all had two non-lethal alleles (Vrotsos & Santschi 1998). However, unlike the more general 'nervousness' associated with piebald characteristics; the lethal white trait can be more easily isolated. Because of the inability of the affected foals to reproduce, "the probability of producing an OLWS offspring is less than 25%" (Lightbody 2002). A DNA-based test exists that can identify identifies horses that are heterozygous for the lethal white gene "The allele-specific polymerase chain reaction test locates and amplifies the specific mutated site in the endothelin receptor B. gene (EDNRB gene)" (Lightbody...

However, temperamental problems with Paint horses bred with other desirable patch patterns, such as piebaldism, are still prevalent, given that there is no single gene associated with the neurological problems associated with this condition. Also, parents may still be bred who are both positive for such 'nervous' piebald traits because of the attractive patterns of their coats. There remains a preference for piebaldism, despite the behavioral problems associated with the condition.
References

Grandin, Temple. (1998). The way I see it: The dangers of trait over-selection breeding for specific traits may trigger unwanted, even dangerous, genetic side effects.

Western Horseman, 120-124. Retrieved October 18, 2011 at http://www.grandin.com/references/horse.genetics.html

Lightbody, Tamara. (2001). Foal with Overo lethal white syndrome born to a registered quarter horse mare. Canadian Veterinary Journal, 43(9): 715 -- 717. Retrieved October 18, 2011

at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC339559/

Vrotsos, Paul D. & Elizabeth M. Santschi. (1998). Stalking the Lethal White Syndrome.

Paint Horse Journal Retrieved October 18, 2011 at http://www.apha.com/breed/lethalwhites03.html