The original Herobrine was a painting. That's it. No ghost, no hacker, just a painting. He was part of the "Brocraft" stream, and the creator had no paintings in his world at the time, and saw a hoax on the internet which he thought was cool, made a resource pack, and put it on his wall to look like HB was in the room. He then entered the room, ran out and pretended to be scared, and ended the video saying it crashed. He removed the resource pack and the painting, picked the stream back up, re-entered the house, and then redirected all his viewers to
this (warning: creepy).
There's a Russian player out there who has an account named "Herobrine" and uses the skin. As you may expect, they tend to get banned from a lot of servers because of this.