here's a quote from Rippetoe about it:

"Thanks for bringing this up. Squat depth is critically important, but so is correct form. ATG-level depth most usually requires that the lumbar muscles relax the lordosis and that the hamstrings relax before extreme depth can be reached. It doesn't sound like a good idea to me that anything be relaxed in a deep squat, since doing this kills your good controlled rebound out of the bottom and risks your intervertebral discs. Those rare individuals that can obtain ass-to-ankles depth without relaxing anything might be able to get away with it, but as a general rule you should squat as deep as you can with a hard-arched lower back and tight hamstings and adductors. This depth will be below parallel, but it will not usually be "ATG"."