Yea it got taken out and was more or less replaced with him heating the knife up before torturing people and stuff with it.

the book was re-written so i expected a lot of things to be different.

wish I hadn't ready this :(

...addressed this at some of the book tour stops.  At the Washington DC stop he mentiioned a couple changes were made and spent a bit of time on this change in particular. 

I agree that the self-inflicted pain behaviour definitely confirmed how disturbed Magnus was but having heard the 2005 version, read the first paperback version and now the hardback version, I can say that while Magnus hurting himself is missed, the hardback version does THE BEST job of making his torture scences feel realistic.  I think this is because removing that bit of over the top behaviour actually enhances the bad stuff Magnus does do in hardback version. I was physically wringing my hands during the torture scence without realizing it!

If you're interested in learning about more changes, to this and other characters in Ancestor, I would encourage you to read the wiki articles on them.  You see in Magnus' article, there is a section dedicated to the difference in the versions.  Be warned...if you haven't finished the book, there are spoilers in the wiki.
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Gmork - Wiki Czar and Thwackacutioner

It lends more credibility to the story that the brother and co-owner of one of the largest genetics firms in the world is only somewhat batshit crazy. Don't get me wrong, cutter-Magnus was great, but it's a testament to Scott's mastering his craft that he could dial back the character at one level and still have him as an effective player (and more realistic character) in the story.

It does make other scenes pop, whereas before it was almost assumed totally batshit crazy Magnus would do what's he's doing.

-Chris Toohey
Blogger : Podcaster : Geek
http://www.twitter.com/ChrisToohey

Yup...this is my general feeling as well. But I think you articulated it better!
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Gmork - Wiki Czar and Thwackacutioner