1. Noun. The physical sense of repulsion upon encountering a concept or situation one finds disgusting.
2. Noun. A situation or concept which engenders this reaction.
3. Verb, transitive. To cause someone to have this reaction.
4. Verb, intransitive. To experience this reaction.
The concept of the "squick" differs from the concept of "disgust" in that "squick" refers purely to the physical sensation of repulsion, and does not imply a moral component.
Stating that something is "disgusting" implies a judgement that it is bad or wrong. Stating that something "squicks you" is merely an observation of your reaction to it, but does not imply a judgement that such a thing is universally wrong.
The statement "kiddie porn squicks me" and "kiddie porn disgusts me" may both be true. In my case, the second sentence is true, and I assume that the first is also true, but, having never encountered it, I have no way of knowing for sure.
In general, distinguishing between "squick" and "disgust" is an important part of living in a tolerant society.
It is my contention that most anti-gay attitudes, for instance, are the result of people finding that gay sex squicks them -- and, because they don't know about the concept of the "squick", they assume that gay sex DISGUSTS them, which implies that there is something morally objectionable about it.
Joe loves hot wax, needles through sensitive parts of his body, cutting, and flogging -- but tickling? That squicks him.