Agreed totally that Avalokitesvara Bodhisattva (known to Mahayanists also as Samyak Vidya Dharma Tathagata) or 'Guan Shi Yin Pu Sa' is not mentioned in the Pali Canon. But may I submit a personal story here that in my years of entrenched Christianity, if I had not had those recurring dreams or fixated mind images of Him (which i tried so hard using various Christian methods to get rid of but failed), I would not have gone on to investigate the Dhamma via accesstoinsight.org back in 1997 or known the Dhamma in my first encounter with the Pali Canon then. So my personal credit to Him for being a Dhamma raft then.
Yes, I noticed that in some Thai Theravada temples, generous allocations were made to house Guan Yin (alongside with some other popular figurines, perhaps out of cultural diversity and religious openness of the Thais to such?
I know of one Thai temple which has the Royal Thai Embassy's patronage in my country whose Chief Abbot consented to having a beautiful side shrine to house a beautiful statue of Guan Yin and the story which I heard was, as a result of a dream to the Abbot, he decided to include Guan Yin in the temple compound.
Namo Amitabha Buddha!