Hi Jill,
I have gone to hydrotherapy classes at our local Y for a year since my LTKR in Aug 08. People in the class have a range of ailments including knees, hips, strokes, etc. We do a range of exercises but our instructor is good at suggesting specific exercises for particular problems. For me they included walking, concentrating on placing the heel down, then the ball of my foot and then the toe. Also ham string curls and squats hanging onto the side of the pool.
If you have access to the "book" (Total Knee Replacement & Rehabilitation - The Knee Owner's Manual was written by orthopedic surgeon Daniel J. Brugioni, M.D. and physical therapist Jeff Falkel, Ph.D., P.T., CSCS.) there is a whole section of exercises in the pool or hot tub.
Good luck.