Tentacruel is truly a Pokémon to be feared in UU, and can compete in standard as well. Its offensive power with Swords Dance-boosted Sludge Bombs combined with Hydro Pump tends to be just too much for teams in both tiers. However, Tentacruel can only really switch into fellow Water-types and perhaps Skarmory, because he has low Defense, and is weak to Thunderbolt and Earthquake, two of the most common attacks in the game. Psychic weakness doesn't help either. His immunity to Toxic and resistance to Water and Ice helps a lot though, it makes him a great counter to Milotic and Suicune in standard, as well as Blastoise and Walrein in UU.
Simple idea that works pretty well. Switch into something that will switch out once it sees Tentacruel and use Substitute. Wear down Steels, Rocks, and Grounds with Hydro Pump or Surf, and, later on, Swords Dance up and Sludge Bomb away. Works very well in standard, but really shines in UU, because about everything that resists Sludge Bomb is weak to your Water move. The main physical walls are Walrein (who cannot touch Tentacruel with the standard set of Rest, Sleep Talk, Toxic, Ice Beam), Gligar (who is OHKOed by a Water move), and Solrock (who is also OHKOed). In OU, you have stuff like Suicune with Roar, Weezing, Swampert, and the like around to ruin your fun.
Surf has the obvious accuracy advantage over Hydro Pump (and the slightly less obvious PP advantage, but that's not that big of a deal, as the Water move's function is solely to hit a very limited number of Pokémon), but Hydro Pump's power can come in handy. With these EVs, Surf will never OHKO max HP Aggron, but Hydro Pump always will. Hydro Pump will easily OHKO Gligar, even if it has max HP, while Surf will always OHKO min HP Gligar, but bulkier versions will survive. Hydro Pump also just barely ekes out an OHKO on max HP Solrock.
Special Sweeping Tentacruel. Substitute is to bluff the first set, and allows you to get in a free hit on whatever switches in without risk. Absolutely owns some common counters to the standard Tentacruel (Swampert and Quagsire, Salamence etc.). Hidden Power Electric can be used as a fourth slot also to take care of Gyarados who can mess this set up pretty well otherwise. Mantine in UU cannot do much to Tentacruel, so usually you'll just want to keep Substitute. Try not to reveal that you are using a special Tentacruel until the surprise will get you a KO (Substitute and Surf / Hydro Pump should be the only moves you use at first).
With Timid you can expect Tentacruel to outspeed everything of 105 base Speed and under as long as they don't have a Speed boosting nature (so Adamant Salamence and Modest Zapdos in OU, and Modest Manectric / Electabuzz in UU), and anything base 90 Speed or lower even if they have a +Speed nature (including Kangaskhan and Gligar), but with Modest you will have more attacking power. Just max out Speed if you go Modest, or, alternately, go as low as 280 Speed to beat Adamant Kangaskhan.
The idea is to set up a Barrier or two, forcing them to attack you from Tentacruel's Special side. Usually this will draw out Electrics like Zapdos, and allow Tentacruel to Mirror Coat that STAB Thunderbolt right in their face. Tentacruel's Special Defense is pretty good, so just by maxing HP, you will survive even a max Special Attack Zapdos Thunderbolt as long as you're on full health. Giga Drain can be used to keep Quagsire and Swampert off your ass, but Toxic will stop them from stalling against you and either switch out or attack you straight up. Hydro Pump is there for some general STAB damage.
While it looks nice on paper, it usually won't work that well. You'll find a lot of people trying to set up something like Substitute or Calm Mind from the likes of Raikou, Gengar and Alakazam on Tentacruel, which he cannot really do anything against. Sometimes they will just weaken with Tentacruel with something else, and then kill you with their Thunderbolt. Or they could repeatedly Earthquake you until it goes critical, which pierces Barrier's defense boost. Still, it can be very neat, and this set actually makes a decent Suicune counter, as even if it Calm Minds to the max, it won't OHKO with Surf and risk a Mirror Coat to the face, not to mention Toxic will keep forcing it to Rest.
For UU, this might work against Lunatone or Manectric, but again beware of Substitute and Calm Mind.
As mentioned in the previous set, Tentacruel can take special hits quite well, and this support set takes advantage of it. Come in on Waters (especially Cloyster) to Rapid Spin those Spikes away or to Toxic foes. Haze helps against Suicune's Calm Mind, or when Curse Snorlax is taking a nap. Note that Haze is illegal with Rapid Spin. Surf or Hydro Pump is there to hit Gengar who may try to block Rapid Spin and Toxic, but it won't do much against Dusclops or Misdreavus. Fillers like Mirror Coat and Sludge Bomb can be put in the last slot. The main problem with this Tentacruel set is that it's weak to many common attacks, and that Blastoise fills its role pretty much better in UU.
A physical Hidden Power (most likely Ground, but Fighting works too) is Tentacruel's only real option for attacking, aside from Sludge Bomb, to take advantage of Swords Dance.
Usually Tentacruel should have 310 Speed in UU, unless it is a more defensive set, is an important point to hit, as the only used Pokémon that will be faster than you are the occasional Jolly Fearow, and Timid Manectric / Electabuzz. Hasty is the best nature for mixed sets, as Tentacruel's massive Special Defense is one of its major selling points, but if you're not using your Attack or Special Attack at all, Timid or Jolly should be used respectively. Stack the attacking stat(s) you're using on sweeping Tentacruel, otherwise you'll want to max out HP and put some in Special Defense.
Checks and Counters
Standard: Swampert is the best all-around counter for Tentacruel, as long as Tentacruel isn't packing the rare Giga Drain. It can soak up Sludge Bombs thanks to its resistance, and use its STAB Earthquake to dish out damage. Steels like Skarmory and Metagross get in the way when Tentacruel wants to sweep with Swords Dance, because Skarmory will Roar / Whirlwind away the boosts while Metagross will Earthquake. A few Surfs or Hydro Pumps should do them in though. Gengar is 4x resistant to Sludge Bomb and can Thunderbolt Tentacruel, but again, beware of Surf or Hydro Pump. Zapdos, Jolteon and Raikou may take quite some damage from a Swords Danced Sludge Bomb, but they're quite fast (Zapdos ties with Tentacruel, the other two are faster) and pack STAB Thunderbolts. Beware of Mirror Coat, however. Salamence and Gyarados can Earthquake Tentacruel and resist his Water moves, but their Intimidate won't work on Clear Body versions and Salamence has to watch out for Ice Beam.
UU: Quagsire is an even better counter than Swampert because of Water Absorb, for the rest he works in the same way. Whiscash plays a mini-Swampert as well, but to a lesser extent. Hypno with some Defense EVs and Reflect can pose trouble, paralyzing Tentacruel with Thunder Wave or hitting hard with STAB Psychic. A Swords Danced Sludge Bomb will bang him up sooner or later though. Kangaskhan can take a beating and try for a paralysis with Body Slam or hit hard with Earthquake. Walrein can Earthquake, or Encore Substitute or Swords Dance, but again these Swords Danced Sludge Bombs hurt. For the rest, Tentacruel is pretty hard to beat in UU. Your best bet is hitting it hard when you can, preferably with Earthquake. If your team is full of physical offense, Psychic, and Thunderbolt, you can just make it impossible for Tentacruel to ever switch in.