[Tolkien]

Horror Harmonica gives the commander holding it the ability to call horrors, which is a great ability if you are an astral nation that can cast astral geyser or horror mark to direct them. It means you don't have to go through the difficulty of using blood slaves on the battlefield, and it turns an otherwise useless indy commander into a useful part of your magic. It's still a very hefty investment though: 40 astral and 25 death gems, without a hammer, but honestly, it's worth it (if you get all the other good artifacts first, like the Sickle Whose Crop is Pain[great for death gem income if you have a quickened SC/thug] or the Chalice or the Aegis). Having an infinite, no blood slave, cast Call Horror is more useful then the 40 or so longdead horsemen you could get with 20 death gems.

I find the armor goes well with encum-0 commanders, like undead or elemental royalty etc, since they don't accumulate fatigue. It also gives a nice regen boost. If you're going to give it to a Myrm, then I suggest making sure the net encumberance is lower then the net reinvigoration, however much they are.

EDIT: Though the thing about horrors is that if the enemy army is completely killed and you still have horrors on the field, they'll start hitting you. Unless you horror mark the horrors, which I do believe leads to them attacking each other.

Also, according to the manual, the harmonica lowers morale by 2 (not sure whose though, the wielders methinks) and also automatically casts the wailing winds battlefield enchantment, a Fear+0 attack on all enemies. That makes it doubly useful.

And don't put a harmonica on an important commander/mage/prophet/god. It horror marks, and horror marks are bad. Badbadbadbadbad. Especially on your god.