We recently had a very interesting post from one of our Peak Testosterone Forum members who stated that progesterone cream "got rid of my gyno in 2 weeks & sex drive booming & erection quality booming!"  Yet another member frequented a forum where the members reported having their morning erections restored by progesterone.  His exact comment was:
"I saw many guys...getting well on progesterone cream. Like returning morning wood, night wood, spontaneous erections, libido, better orgasms etc." 
Researchers are already onto the fact that progesterone is ultracritical to sexual performance in males. An animal study on male rats showed this and the authors summarized by saying:
"The rats with low or no sexual activity had lower progesterone levels relative to those displaying the highest sexual performance after 9 days of training. Testosterone, in turn, was also significantly reduced in animals with low/no sexual performance compared with excellent/adequate rats. In conclusion, progesterone may be a limiting factor to promoting sexual performance in male rats." 
NOTE: Lately I do not see as many men using progesterone creams from their doctors. The reason I suspect for this is that it can accumulate in fat tissues. What seems to be more common now is for men to take low dose pregnenolone 15-50 mg/day and then monitor progesterone before and after to make sure it increases significantly and also does not go too high. I discuss my experience with this here: My Experience with Low Dose Pregnenolone and DHEA.
What about in humans? Well, this appears to be verified in one patent application that has a medical doctor's experience with using a bioidentical, compounded testosterone/progesterone cream that miraculously cured erectile dysfunction in the majority of his patients. Note that these were "hard cases" - men with lots of health issues. Was it solely the testosterone? Definitely not! Testosterone boosts libido, actives eNOS, lowers insulin and generally protects arteries. But testosterone is no panacea or we would have never needed the PDE5 Inhibitors such as Viagra and Cialis for E.D. .
In my opinion, it is clear that this doctor knew what he was doing by combining progesterone AND testosterone. It is the combination that is the "magic formula." Here was his thesis: most men over 35 begin to struggle with three major hormonal issues (that affect erectile strength):
And we have seen this pattern on the Peak Testosterone Forum. The author contends that progesterone's erection-improving superpowers come from its ability to correct all of the above simulataneously. He documents how the cream raises free testosterone and progesterone and lowers estradiol and then makes the following statement:
"Our initial goal in this study was simply to correct the hormone imbalance in our patients by replacing the hormones that were deficient. Knowing that hormone imbalance is one component of erectile dysfunction, we were only hopeful that correcting this one component would result in full erections. To our great surprise we had tremendous success in correcting erectile dysfunction despite the number of co-existing medical problems."
Basically, he is saying that even with major underlying medical conditions, such as hypertension and diabetes, you can generally achieve great results by improving the big three hormone levels above. I urge you to read the study - reference 5 below - and the case studies therein. This simple cream seemed to produce near miraculous results for many men and, again, these are men with pretty serious E.D. and health issues generally.
So just what does supplementary progesterone do to improve erectile dysfunction? The answer probably lies in the following changes:
1. Lowers Blood Pressure. Progesterone has a less well-known positive effect: it lowers blood pressure (if you take enough). In fact, one study of men and women taking oral progesterone found that it did so very significantly.  Furthermore, it does not do this through nitric oxide, but rather via a different mechanism: it draws sodium out of the arteries and stimulates the renin system.  Even though it's not a traditional NO booster, it will increase blood flow and this includes blood flow to the penis of course.
So progesterone actually does something that testosterone is known for: it works on both the endocrine AND blood flow sides of the house. And, of course, combining progesterone with testosterone likely provides a synergistic effect.
2. Lowers Estradiol. I have read that progesterone often raises estradiol in men. However, the above study (and others) are clear that progesterone usually lower estradiol. For example, in the previously mentioned quasi-study and patent application, the physician talked about one man that more than doubled his free testosterone yet reduced his estradiol from 26 to 14 pg/ml.
All men who significantly increase testosterone on HRT - and remember that these men were given a cream with progesterone AND testosterone - also experience a significant increase in estradiol due to the aromatization of the new testosterone. Therefore, this man's estradiol should have easily increased substantially from 26 to at least 40. Yet, instead, he dropped to 14.
The author explains that he believes that not only did the progesterone do this but that it is expected behavior:
"In a three to six month period the patient had improvement in his ERECTILE DYSFUNCTION back to a place of normality. The corresponding erection showed a free testosterone that went from 72 to 168 and his estrodiol went from 25 to 14. Both of these would be desired effects of the Progesterone/Testosterone cream." 
Again, I have seen many times that men must both increase testosterone significantly and get estradiol in a range of about 18-35 pg/ml to heal their libido and erectile issues. So these are not new concepts.
3. Prostate Size. A healthy prostate can help with erectile function for reasons not fully understood. Of course, the prostate plays a role in the orgasm, but many men with prostatitis and enlarged prostates seem to have a larger-than-expected rate of E.D. and getting these under control sometimes really helps them. Some commentators say that, because of progesterone's DHT and estradiol-shrinking powers, progesterone can also shrink the prostate.
Talk to your doctor and verify the above. I should also mention that, if you read the patent case studies carefully, a few of the men developed elevated (but apparently benign) elevations in PSA right after using the cream. Still other men experienced a drop, so more study work needs to be done, especially since it was small and non-peer reviewed study.
CONCLUSION: So should you take progesterone? Well, I can't answer that for you. There are no studies and even relatively few men currently taking it. However, I can tell you that there is another route that should be able to accomphlish the same thing, even if you have the above three hormonal issues:
Testosterone + Arimidex
This will, of course, increase testosterone and lower estradiol. However, better than taking Arimidex, which can increase clotting risks in some men, is losing weight and/or going on a Low Fat Diet, which, according to one study, will keep your testosterone where it is at and almost halve your estradiol levels.
My point is that, if you and your doctor feel that progesterone is risky, you can just do basic HRT, i.e. exogenous testosterone with an AI if necessary and duplicate the effects of progesterone. Now some men and some physicians might prefer giving progesterone to a man with low levels, because it seems natural to simply replace what he has lost from aging with a bioidentical compound. And that's fine - I am just letting you know the various options out there. Personally, I will probably not start using it until they do a decent prostate study on it. (Remember that I have had a medium high PSA.)
CAUTION: As mentioned above, progesterone can lower blood pressure, so discuss with your doctor. I have other concerns about progesterone in my page on The Potential Dangers of Progesterone.
NOTE: Progesterone may help some men in the bedroom by boosting some of the cosmetic issues that come with aging. One man claimed it grew testicular volume and still another that it backed off his gynocomastia. (Progesterone can play a role in gyno, so this is a counterintuitive finding.) The comment specifically was "not sure it really helps my ED, but I did notice my 'guys' stopped shrinking and I felt a lot better." 
5) http://www.google.com/patents/US20070167418, Publication number: US20070167418 A1, Application number: US 11/221,652, Publication date: Jul 19, 2007, Filing date: Sep 7, 2005, Priority date: Sep 7, 2004, Inventor: Steven Ferguson
6) Steroids, Apr 1996, 61(4):166 171, "Effects of estrogens and progestogens on the renin-aldosterone system and blood pressure"
7) Br Med J (Clin Res Ed), Jan 5 1985, 290(6461):13 14, "Natural progesterone and antihypertensive action"
8) J Sex Med 2010;7:2435 2444, "Influence of Progesterone on Sexual Performance in Male Rats"