The Hydro-Pack is purchased from Edwina on planet Hoven for 2,000 bolts. In subsequent releases in which it appears, it is initially available with Clank.
The Hydro-Pack is used by Ratchet by holding while swimming underwater. This causes the Hydro-Pack to activate while Ratchet kicks his feet. It allows Ratchet to swim faster underwater.
The Hydro-Pack can be used to swim against currents and reach otherwise inaccessible areas in the original game. This allows the player to reach a gold bolt on planet Novalis by swimming against the river to reach a secret area.
Behind the scenes
In Going Commando, the Hydro-Pack was intended to feature a gunsled gadget, which attaches a pair of torpedoes to the Hydro-Pack to defeat enemies with, but was cut due to lack of suitable uses. The weapon can still be found in the NTSC manual next to other weapons. This would be obtained in Canal City on planet Notak by taking the path on the left to the player. This gadget was cut, and thus a nanotech upgrade was featured as the reward at the end of the path instead.
In the 2016 reboot, Clank begins already equipped with the Hydro-Pack, though the river currents in Novalis no longer lead to a secret area.