Vajrapani can take peaceful or wrathful forms. There are also various "levels" of Vajrapani--from lower to higher tantra. In some systems he's viewed as a protector, in some systems he's viewed as a Bodhisattva, and in some systems he's viewed as a completely enlightened Buddha, and as a yidam practice.
He represents the Body of Buddha--whereas Avalokiteshvara represents the speech, and Manjusri the mind.
He also represents the "Power" of the Buddha, whereas Avalokiteshvara represents the compassion, and Manjusri the wisdom.
In Nyingma traditions, Vajrakilaya is seen as the most extreme wrathful form of Vajrasattva. So, if Vajrasattva is the peaceful deity that represents purification, then Vajravidarana is seen as the semi-wrathful form, Vajrapani as the wrathful form, and Vajrakilaya as the extremely wrathful form.
Vajrakilaya is most definitely a yidam. Nyingmapas often take Vajrakilaya as their first yidam practice, and many maintain it as their main yidam practice. There are many Terma Lineages of Kilaya. Sakyas practice this as yidam practice, and they have a lineage that goes back to the Nyingma Kama. Even some Gelukpas practice Kilaya--HH The Dalai Lama maintains a practice of Lerab Lingpa's Yang Nying Pudri, which is a terma of Kilaya practice, and Namgyal Monastery maintains this practice. Karma Kagyupas practice Kilaya as a Yidam, as well. Most Karma Kagyu three year retreats will begin with one week of intensive Vajrakilaya practice, to purify and dispel obstacles and repair samaya breakage. Kilaya practice is also usually one of the short daily recitation requirements in a three year retreat, regardless of what the "main practice" is, along with daily protector recitations, vows, Chod practice, Sangcho, Surcho......
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