Prepared Horseradish - Is sold in grocery stores and is made with horseradish root, vinegar, water, and salt. You can make it at home as well. Horseradish Sauce - Is made at home or in restaurants and combines prepared horseradish with cream, sour cream, or mayonnaise, and other ingredients to add flavor and make creamy for use on dishes like prime rib, steak, or deli style sandwiches.