I read a fantastic article by one Craig Weller about what he refered to as the "third world squat" in a great article on T-Nation. What he calls the third world squat is nothing more than a rock-bottom squat. Your knees should be in your armpits and your weight on your heels.
Unfortunately, many (most?) people can't do this. I've heard complaints about improper leverage that doesn't allow them to do this. I disagree. If you watch most children, they can and do this squat with veritable ease. That is, until they start sitting down in chairs too much. Then before they know it, they're an adult rationalizing why they can't do one anymore.
After reading this article, I rapidly switched gears and got myself doing a full range, third world squat. It wasn't terribley hard. Mr. Weller has some great ways to get you going on this move. I also had a few other things that I tried to get myself down.
1. Stretching My fascia. For those who don't know, this is a thin membrane that covers your muscles. Each muscle isn't individually shrink-wrapped though. Several are covered by the same fascia. For our application, stretching out the fascia that connects the muscles of the back line can help out immensely when doing squats. Find a hard rubber ball, sit down, and roll the ball under the arch of the foot while pressing firmly, but not painfully, for 30 seconds for each foot.
2. DVR Squats. Tense all of your leg muscles while lowering yourself down as far as possible. Don't push yourself too much. Go down a comfortable distance for 5-7 reps. Follow up with some normal speed squats.
As I previously mentioned, I don't have chronic back pain but I haven't had any since I mastered this move. I firmly believe that this is another key for a pain-free back. After all, the lower you go, the more you can use your legs to lift an object off the ground rather than your back.
Read the article here, it's well worth your time....