Shot placement is the key to that game. I've been using my .17HMR to shoot squirrels for a while now. I like to keep my shots to the head/neck area or go center of mass. Head and neck shots are preferable, but if the only shot I get is the middle of the body, I'll cut 'em in half. All I ever eat is legs anyway. I never cook the whole thing. Body shots do tend to get messy though.
The reason I like using the v-max loads for squirrels is because of the tendency of the round to shatter like glass on a hit. There will be no errant bullets or ricochet's as long as you choose your shots, and always have another tree or large limb in your background. The .22LR is the traditional choice for squirrel, but I like having the confidence of being able to hit them at 150 yards.
I guess it needs to be said also, I usually hunt squirrels with my .17HMR like I would hunt deer. Out of a treestand, where 95% of my shots are at grey squirrels on the ground. As far as shooting into the trees goes. But, like I said, you can't do it everytime, but just make sure that there is something behind the squirrel that will "soak" up a miss.
Linked pictures. Second one might be a tad graphic for some. You were warned. The second squirrel was running right to left, quartering away. The bullet entered just behind the front left leg and exited through the bottom jaw.
First Squirrels w/.17HMR
Trauma caused by .17HMR