Does Herobrine exist?
Notch on Twitter is pretty clear on the topic:
I have no plans of adding herobrine.
Notch
Short Answer: No.
Long Answer: NO.
And he "removed" him in the 1.6.6 update.
No. While modding I must have seen every source file since Alpha 1.0_17 a couple of times, and there's simply nothing there. Unless he's an emergent feature of the deepest bowels of the rendering code.