When movies are released on home video/DVD, are scenes or lines ever
removed that were present in the theatrical version?  There have been
multiple times when I've seen a movie on film, remembered a scene or
line in it, then it seemed like that line was missing when I later saw
it at home.

Specifically, I remember that this happened in Mystic River.  It was
during one of the most dramatic scenes in the movie, when the cops
were confronting the kid in the kitchen with the gun, while at the
same time Jimmy was about to kill the man he thought killed his
daughter.  After the kid shot the gun and just missed the cop, I
specifically remember that one of the detectives made some wise crack
about it.  It really annoyed me when I saw it, because it seemed like
an unnecessary piece of comic relief that took away from the drama of
the scene.  However, when I saw the DVD, that joke was definately not
present.  Was I just imagining something, or might a change have been
made?

Thanks

The basic answer to you question is yes. This does happen. The reverse
might happen as well (Apocalypse Now Redux being the most obvious
example).

Often times, before a film's wide theatrical release, they are
screened to test audiences or screened at gala premieres. With these,
the filmmakers gauge audience responses and decide what should and
shouldn't go in the final cut.

I'd say that normally, the wide theatrical release version is normally
what ends up being released on DVD but (and especially with really old
films where portions of the original film may have been lost or beyond
repair) it is not always the case. As for your Mystic River example,
I'm uncertain of the actual answer. My best suggestion would be to
watch the scene you're discussing with commentary on and see if either
Tim Robbins or Kevin Bacon have some insights on the subject. You
might also want to check for deleted or alternate scenes though they
might not be available on the DVD.

For what it's worth, I have an honours degree in Film Studies.