Here's how I do it: First, make a perpendicular cut on the undside of the tail at the base, going through the tailbone, but not through the skin on the top side of the tail. Secondly, slit the pelt, not the muscle, along the back of the rear legs. Get the pelt started off of the squirrel with your fingers. Now, place the squirrel on the ground on it's back and place your foot on top of it's tail at the base. Grab the squirrels hind legs with your hands and lift up, which will pull the pelt off going towards the front of the squirrel. This is easier to me than having to pull the pelt off using only my hands. After this, the squirrel will still be wearing 'britches', which will come off rather easily using only your hands. Lastly, I ring off the head and feet with my pocketknife, and then gut him. Of course, my way of skinning is strictly for eating meat, and not saving the pelt.
P.S. - Always be sure to wear protective gloves when dressing wild game. Exam or surgical gloves tend to work good for me.