i have yet to read the GN, but what is up with the Squid and whats the fuss over it?
In the book instead of framing DR Manhattan and using his replicated energy to destroy various cities around the world, what Veidt does is create a fake alien creature (the Squid) and transports it to New York, which is destroyed as the creature dies (it cannot survive the teleportation, a fact Veidt is aware of). Instead of the world uniting out of fear of Manhattan like in the film, the world unites to defend Earth against Alien invasion and future Alien threats.
The books also involves some of the most emotionally powerful and harrowing scenes from comic book history, with hundreds of bloody corpses littering the streets of New York. A big disapointment with the film is that alot of this emotionally disturbing imagry is removed, and instead New York essentially becomes a crater.
The Squid ending also contains alot of different meanings and alot can be read into it. It is intentionally cheesy, a B-movie monster used to unite the world in the biggest practical joke in history. This is partly what caused the Comedian to crack and have a breakdown at Moloch's. This scene is still in the film, but I don't think Blake would react the same way to simple explosions, which is what the films ending essentially is. Blake seemed unconcerned with the growing threat of Nuclear War, so I think it was the method of salvation which terrified him. After all, in the book, he begins to talk about the scientists and artists who are helping create the creature, but cannot finish his sentences due to being traumatiased by what he has discovered. The creature also has a central "all seeing" eye, a theme which runs throughout Watvhmen (Adrian has a third "all-seeing" eye on this costume in both and the book and film, although in different places).
The books ending also involves just New York being destroyed, not major cities all over the world. In the film, by destroying multiple cities all over the world, Adrian essentially removes all the targets of a Nuclear War anyway. There is no Nuclear fallout, but he has still destroyed most of the cities a war would have destroye anyway. It is also much more of a cliched "villainous" action. By only destroying New York in the book, Adrian's intellect comes through more than in the film, as he shows that he knows by targeting one place at one time with one creature he could save and unite the world. The less deaths caused by this singular city being destroyed also allows for a better debate on whether or not Adrian is a villain or a hero, as it is more comparable to historic events, such as the bombings of Japan in WW2.
Sorry for going off on a rant there, but thats the essential differences between the film and book endings. As you can probably tell I prefer the book's ending alot more.