There are many legends of the mighty Excalibur. One of the most famous Legend is about how King Arthur's sword broke in a battle so Merlin took him to a special place... Some say it was Avalon that Merlin took him too. Anyways, the Lady of the Water held up the mighty sword of Excalibur in the middle of the lake and Merlin conjured a boat to take Arthur to the middle of the Lake to get it.
Then there's the ever popular Sword in the Stone which some say is Excalibur. As most people know, King Arthur was raised as a squire by, I think it was his Uncle, depends on the book you read. Anyways, when Arthur was about 11 or so he stumbled upon the church courtyard where Excalibur was held and pulled it out of the stone and became the rightful king of all England. It's a very entertaining story if you don't attempt to read the stories written in Old English, I don't recomend trying it...
I think it's very sad how King Arthur's stories all tend to end badly. I read two books on him, one in Old Englich =/ and one that wasn't. In both books he was betrayed by his lady. It also doesn't help that his Half-sister was Mogaine le Fay who turned to the dark side out of jelousy and tried to kill arthur... It's very sad actually, but a good story overall.