That's right John, both the Littlefield Building and the Stephen F. Austin Hotel had floors added to them. I believe the Littlefield Building had 1 floor added 2 years after it was finished. And the Stephen F. Austin Hotel had 2 floors added, I don't remember the date though.
And yes, there have been buildings in the past that were torn down. One of them was the 1915 Brackenridge Hospital Building. It was 8 floors tall. The building was torn down in 1984 to make way for the new Austin Children's Hospital adjacent to the main building, the existing white building today. The 1915 building was not the original hospital building however. Brackenridge Hospital is actually the oldest public hospital in the state, it was founded in 1884.
Here's a picture of East Avenue, which later became I-35. This was taken in 1960, looking north. The 1915 Brackenridge Hospital Building is to the left. My brother was one of the last babies to be born in this building in 1983. My dad actually took a brick from the demolition site after it was torn down.

A closer view. This was actually a very nice looking building. It's a shame it was torn down.

The rest of these pictures came from Ausinpostcard.com.
And of course there have been several state capitol buildings. The most notable one from the past was this one at the end of Congress Avenue, which burned to the ground in 1881. The white building in the upper right is the General Land Office Building, which still stands there today on the southeastern corner of the Capitol grounds. It's actually the 2nd oldest state government building in Texas, it was built in 1857. The oldest is the governor's mansion, built in 1856.

General Land Office Building up close. Today the building houses the Capitol vistor's center.

Old Travis County Courthouse. This building stood across the street from the Capitol at 11th & Congress. It was built in 1876 and was torn down in 1964. I have no idea why they had to demolish it. Oddly enough the site today is occupied by a parking lot of all things.

Here is the Alamo Hotel that LoneStarMike mentioned. I'm not sure when it was built, but I believe it was demolished around 1984 or so.

Another old hotel that bit the dust, was the Texan Hotel. This building stood on West 7th Street. I know very little about it, when it was built, or when it was demolished.

The Commodore Perry Hotel, built in 1948. This building still exists as One Commodore Plaza. It was remodeled in 1984 and turned into an office building. Plans are underway to turn this into "Brazos Place", a residential building.

Brackenridge Hall at UT. I'm pretty sure it doesn't exist anymore.

The greatest loss of architecture to Austin was this building: the University of Texas Old Main. Construction started in 1883 and was completed in 1891. The building was built in 3 sections and construction was strung out. This was the first building built for the University of Texas. It was torn down in 1935 with much opposition. It was 160 feet tall, making it the tallest building ever demolished in Austin. Today, the UT Tower stands in its place.

Old Main, I think if I could have one building back that was demolished in Austin, it would be this one.

St. Mary's Academy. This building stood at the corner of East 7th & Brazos. Today the Omni Hotel stands in its place. This building was built in 1885. It was demolished in 1954 after the school moved to another building. This is the site of the first governor's mansion which was built in 1839 by Edwin Waller. Edwin Waller was of course Austin's first mayor. This was during the time that Texas was its own nation, and Mirabeau Lamar lived there. The building burned to the ground though in 1847.

This is another building I really hated us losing. The Seton Infirmary. It was built in 1902. It was located in West Campus, at the corner of West 26th & Rio Grande. It was demolished in 1975 by a developer that built a large apartment complex in its place. The street where it stood though is still named Seton Avenue and dead ends where the building once stood. Seton moved in 1975 to their new campus in Central Austin off 38th Street.

Another view of it.