is the blood line that important

Most horses have royal bloodlines and usually what destinguishes a good pedigree from a bad one is the female side. Having some good mothers and maternal grandmothers separates a lot of horses from others. That being said, there are always exceptions. One of my favorite horses of all time was John Henry and he's got a really blue collar sort of breeding being out of no name sire and dam. Very few race horses are sired by stallions that haven't proven themselves, but John Henry is a big time exception. Here's his pedigree: http://www.pedigreequery.com/john+henry

Good blood lines are only half of what makes up a good racehorse, the second(and argueably more important) is the training it receives. It would be the same thing as a sumo wrestler and a marathon runner having a child versus having 2 marathon runners having a child. Which offspring would you expect to be able to handle running at long distances? Based on simple math, you would choose the chile of 2 marathon runners. They would both be condiioned to that kind of a race, and would most likely continue to run after the child is more, and eventually bring the child into running with them. With the sumo wrester/marathon runner, it could go either way. While Sumo wresters are fit(im assuming here, how else do you throw someone thats 300 lbs around?) they still dont have enough stamina to run a marathon. Same thing with horses. They are bred for stregnth, stamina, and speed. So by combining different variations of the 3 they try to make the best canditate to win. Clearly, it doenst always work, but thats why there arn't many Triple Crwn winners, because there is always someone out there hoping their training will earn them the win.

Yes, I have noticed that too. In the world of horse racing and horse rearing, the issue of purebred horse is one tht is very much on the minds of ranch owners. I don't really know the significance of hving purebred horses, but apparently, it is supposed to ensure that cetain characteristics such as speed and stamina, are kept and not tainted by breeds outside a pure bloodline.

Some horses come from so-so bloodlines and run circles around the other horses. Some great racers have not "thrown" great off spring.

Good bloodlines give the horse a better chance of leading a good career in whatever specialty that may be. Excellent breeding with champions will probably produce a better foal than one from low-class parents, but that does not mean that the lower-class horse will not be better. In fact, many horse racing champions are not closely if at all related to previous champions today. The bloodlines can have an affect on the foal produced, but like I said, the foal's performance is not dependant on it.