I've tried using horseradish in a sauce and while the horseradish flavor was still in there, that nose hit you take with a bite of the good fresh stuff wasn't. That burn comes from enzymatic activity. Here's how it's explained on the Silver Spring Foods website:
[SIZE=13.3333px]"Horseradish has a relatively high concentration of glucosinalates stored in its roots. When the root cells are crushed by cutting, chewing or grating, enzymes are released that convert these glucosinalates into highly volatile oils called isothiocyanates. It is the isothiocyanate that gives horseradish its characteristic bite.[/SIZE]
Finer grinds of horseradish are usually hotter than courser grinds because more volatile oils have been released.
If freshly grated horseradish is exposed to air for long periods of time, kept out of refrigeration or stored improperly, it will lose its heat quickly."
[SIZE=13.3333px]From my experience trying to work it into a sauce, heat will destroy most all of the character of the horseradish. You'll still retain some of the flavor of the root however it will be much reduced from what you get with the raw ground root. My concern for keeping everything safe and processing the sauce properly kept me from adding a cold blend of the root to the cold sauce. Some professionals who have more experience and the proper equipment could probably pull it off.[/SIZE]
[SIZE=13.3333px]JMHO

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[SIZE=13.3333px]RM[/SIZE]