Indeed, the steering lock was inserted through the back (or front) of the head tube (a little tube brazed on), and immobilized the steerer tube inside, usually at an angle. So you could roll the bike, but not in a straight line.
"My mom's Peugeot folding (take-apart, in fact) bike with small wheels in the 1970s had that feature, and I remember it worked well, but didn't last.
Another lock popular when I was a child in Germany was a bar that swung across the spokes on the rear wheel. The key stayed in the lock when it was open, so you wouldn't forget it. Unfortunately, those you could pry open with a screw driver. Lightweight and locks don't seem to go together well!"
Steering locks were indeed quite popular on bikes in the 50's, 60's and 70's in Europe. As mentioned by Jan, Peugeot used them on many different models aimed at the European market. More frequently on mixte frames. They were however far more common in Britain than in France. Raleigh and most of the big brands fitted bikes with 'lockable' fork crowns. Many of these also made their way to North America in the 60's and 70's. These locks have however been around for a long time. One of the bikes that I brought to Trexlertown for sale, a track/road bike from the 20's has just such a steering lock. The bike can be seen at: http://tinyurl.com/