Mechamo Crab Kit, modified with a Cabbage Patch Kid and LED eyes. This video shows it in action:
And this video shows it being assembled:
MAKE Build: Mechamo Crab & Halloween Hack from make magazine on Vimeo.
You can buy the kit here. Go here for directions on assembling the monster. Seems like something right out of Toy Story.
*If you're looking for something simpler, try these paper toys.
*Buy Kaiju at eBay.