I think Herobrine is real, first off.
Theory: Herobrine's code was programmed in but before being actually implemented, they (meaning Notch) scrapped the idea and deleted the code from the game. Herobrine's code, if Notch really did have a deceased brother, absorbed Herobrine's real spirit. Herobrine didn't want to be deleted. Herobrine is hostile and angry. Possibly intended to be a boss, angry either at being deleted, dying, or just plain evil, he wanders around games seeking vengence for any and all wrongs done to him.

Now when it says "-Removed Herobrine" on the updates (I think the most recent was the Pretty Scary Update or something like that?) they're trying to but can't.

We should just make up our own story

Well, I believe that his accout was corrupted, and he IS notches brother. The glitches that occur in minecraft are caused by him, and that he is just misunderstood. He tries to show his brother he CAN do things well, although his brother sees him as a corrupted family memeber, and regrets it. Herobrine thinks he did it on purpose. But, the day he DID kill him, he realized he can't undo anything he had done.....

I used to think him a Glitch. Untill I ran into him. Now I know he's an entity in the game, by hacker, by default, or by something else I dont know. But I will always belive he's real