So, I've learned a few things that I think might be helpful to others. First off, something that might be a massive spoiler as I don't remember seeing anyone mention this. However, I can see this seriously screwing an early game player, so I suggest you read it.
Never, ever, EVER:
Parry a squid. You won't get pulled in, but your sword will, and the squid will fling it behind him.
Second, squid seem to need a second or two of constant line of sight before they attempt to grab you. Unlike the bullshit from skeletons, this "charge" time resets every time you break line-of-sight. Consequently, a two block pillar, or a conveniently placed tree, on the beach will allow you to pop out, take a swing, fall back, and repeat to kill squid safely.
Third, night vision potions allow you to see squid underwater more easily. If you need to cross a river at night, these will let you pick a safe spot to cross.
Hopefully that's helpful. Anyone else have tips fighting squids or protecting oneself from them?