The idea of giant monsters lurking in the depths of the ocean has probably been around since the first pre-humanoid saw the form of a shark swimming through the shallows before disappearing out to sea. Since that time, we've explored the oceans some and we know it isn't teeming with creatures just waiting for us to unwittingly swim into their reach. However, we've also discovered that, in some cases, there really are creatures we should be very afraid of.
Size: Actual size estimates are hard to come across, but it's generally accepted that a real Kraken would stretch hundreds of feet across, from tentacle tip to tentacle tip.
Appearance: 8 - 10 tentacles, extending from a central mass, which can be bulbous like an octopus, or pointed like a squid. Occasionally, it also has humanoid features.
Threat: High. The Kraken is a predator, attacking ships, smashing them apart and devouring the crew as they flail about in the water.
The Kraken can be found anywhere in the ocean, though the deeper, the better, and reports stretch across all the seven seas, from the coast of the UK, to the Caribbean, to the Philippines. It is more common on the open ocean than close to shore, but there is nowhere off-limits to its reach.
In recent years, proof of the existence of Giant and Gigantic Squid have given credence to the idea of the Kraken. While such creatures don't stretch to the size stories report, they prove that giant animals can still exist undiscovered on this world we claim to rule. Giant and Gigantic Squid have been put forth as the reason for the Kraken legends, with the extra size attributed to exaggeration, due to primitive sailor's panic at having seen such creatures. They certainly possess the size to be terrifying creatures, and they are undoubtedly dangerous creatures. If they have the same aggressive disposition as their smaller cousins the Humboldt Squid, than they would be almost eager to come across a diver or swimmer in the water to grab and devour.
Reports of the range of the smaller, aggressive Humboldt increasing both North and South along the Western coast of the america's offers more problems than just dealing with the these smaller creatures. Squid are cannibalistic, and it has long been suggested that Giant and Gigantic squid regularly feed on their smaller cousins. The show Monsterquest went on an expedition to test such theories and managed some very impressive footage of an extremely large squid that they were unable to identify. With the spread of the Humboldts, it's very conceivable that the larger versions will spread out as well, following their food sources as they cover more and more of the ocean.
So, while you shouldn't be too worried. It never hurts to be aware of what might be lurking in the dark abyssal depths below you if you happen to go out swimming in the ocean or out on a little day sailing trip. After all, when you're talking about something as massive and powerful as the Kraken, it's very possible that many sightings are never reported, purely because there are almost never any survivors.