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In Crystal and the original Gold version, it was a member of my team since shiny Pokémon still seemed incredibly exotic back then. In Heart Gold, I boxed it since I already had a reliable water type (Feraligatr).
I personally go for the catch. I actually used him as a team member, since I really needed a Pokemon that can use Surf if I didn't have Pokemon that can use Surf by that time. Even though Gyara isn't really a Surf user in the competitive scene, in-game it seemed to work out fine.
Never really liked Water types to much, but I used him as a HM slave. With the water types I had, I never really was keen on giving it both Surf and Waterfall, so that's where it came in handy! :)
Well, although I've never used it in a team (other than one time where I had a two-gyarados red-and-blue team for doubles in the Battle Tower), I've found it's a good pokémon for Jump in the Pokéthlon.
The fact that everyone gets a Shiny Gyarados in the game kind of ruins the appeal, and I feel a Shiny Gyarados is even less awesome than a regular Gyarados, who I've never used. I catch it for the same reasons I catch legendaries, and box him forever. Every time.
I managed to catch it, then I went ahead and boxed the little guy. I didn't see a point in using it in my team since I already have Lanturn and Quagsire on my team that are able to use water-type HMs such as Surf and Whirlpool.